modeling

Operational

5 Ways to Improve Model Risk Management

How well a financial services firm fares in a crisis isn’t down to luck. A large part of their success likely depends on the robustness of their model risk management (MRM) processes. By continually...

November 17, 2023 | By Miles Elliott and David Asermely

Operational

The Road to Better Model Risk Management

As the financial sector faces the most treacherous risk climate in more than a decade, financial firms are reevaluating their model risk management (MRM) practices – and not a moment too soon. Errors...

October 27, 2023 | By Miles Elliott and David Asermely

Operational

Model Risk Management Challenges and Opportunities in a Volatile World: A Q&A with Evan Sekeris

Contending with an unprecedented combination of shocks, financial risk modelers have lately had to muddle through some very tough times. Indeed, when you are relied upon to forecast the financial...

January 20, 2023 | By Tod Ginnis

Operational

Model Risk Management Lessons Learned: Tracing Issues from the Pandemic to the Great Recession

Even before the pandemic, model risk management (MRM) departments seemed to be on shaky ground. Indeed, at many financial institutions, credit risk modeling had become largely a check-the-box...

July 8, 2022 | By Deniz Tudor

Credit

How to Improve LGD: Unlocking the Generalized Area Under the Curve

It is difficult to gauge the performance of loss-given default (LGD) models, partly because it’s hard to discern the difference between estimated and realized LGD. But the generalized area under the...

January 14, 2022 | By Marco Folpmers

Operational

Risk Accounting, Modeling and Non-Financial Risk: An Argument for Better Integration

Not much more than a decade ago, we were in the midst of the global financial crisis. In contrast to the crisis that is now looming - climate change - banks were then the polluters, not with toxic...

August 13, 2021 | By Peter Hughes

Operational

OpRisk Capital Chess: Banks Lose First Match

Playing the white pieces, the banks led with the regulatory capture opening. In a sequence of expertly coordinated moves, they progressively took control of the chessboard. That should have led to an...

April 1, 2021 | By Peter Hughes

Operational

As Catastrophe Losses Rise, Models Adjust Incrementally

Record numbers of hurricanes and wildfires are unlikely to prompt significant changes in models gauging the probability of resulting losses, but tools accompanying recent catastrophe model updates...

February 5, 2021 | By John Hintze