Modeling the Future: RMA Survey of Model Risk Management, Vendor Model Validation, and Third-Party Model Risk Management

Models permeate the financial services industry. Model risk management (MRM) has evolved in parallel, but not always at the same pace.

April 2011 was a watershed moment for model risk management. That month, the Federal Reserve Board (FRB) and the Office of the Comptroller of the Currency (OCC) published the Supervisory Guidance for Model Risk Management (MRM Guidance), which was adopted, verbatim, in 2017 by the Federal Deposit Insurance Corporation (FDIC). This g…