SR Letter 11-7 - Supervisory Guidance on Model Risk Management
Duration: 60 Minutes
This training program will detail why SR Letter 11-7 has become the gold standard for model risk management, with its principle being adopted not only by banks but also virtually all U.S. financial institutions.
Objectives of the Presentation
Why should you Attend
- Understanding the SR11-7 guidance
- Applying the guidance contained in SR 11-7
- Reviewing current models in context of SR 11-7
- Improving the effective use of risk management models
- Evaluating policies and procedures that govern the development and use of risk management models
- Ensuring that there is appropriate board of director and executive/senior management oversight of the development and use of risk management models
Financial institutions rely on models and quantitative analysis to perform key activities such as investment valuations, risk management and liquidity and capital management. A sound management of the risks inherent in the use of mathematical models is imperative to reduce the risk of reliance on flawed or misapplied models. SR Letter 11-7, issued jointly by the Federal Reserve and OCC, provides comprehensive guidance for banks on effective model risk management.
This webinar will offer attendees an understanding of the background behind SR Letter 11-7. It will further discuss the purpose and scope behind the supervisory guidance on model risk management.
Who will Benefit
- Background and objective of SDR 11-7
- Summary review of types of risk management models
- Defining model risk
- Purpose and scope of the guidance
- Model Risk Management
- Model Validation
- Management oversight
- Policies and Control
- Roles and Responsibilities
- Model Developers
- Model Evaluators
- Business Managers Utilizing Models
- Financial Managers Utilizing Models
- Risk Managers
- Board of Director Members
- Executive and Senior Managers
- Risk Educators
In April 2011, federal bank regulators published SR Letter 11-7, entitled 'Supervisory Guidance on Model Risk Management.' SR Letter 11-7 outlines the regulatory expectations with respect to the risk management processes and internal controls that banks must implement to ensure that models are developed, implemented and used in a well-controlled manner. The guidance also describes the roles of the various areas involved in the management and oversight of models, including the need for independent model validation and effective challenge.