Model Risk Assessment A Model Doesn't Begin With a Model

The recent expansion of model development from origination to exposure valuation benefits the decision-making process of the management in financial institutions. However, models also come with costs, as well as risk. To understand model risk assessment, you must first understand model development. Each step of the model development process has potential risks. This whitepaper focuses on the first two steps of the model development process: data collection and data cleansing.