Qualitative Models

Banks have been using models for decades to inform, drive, and even directly make business decisions. They are used in almost every area within a bank: credit decisioning, marketing, financial planning, stress testing, capital markets, and the list goes on. Banks have grown increasingly reliant on models to support these functions and processes over recent years, with the obvious implication that these models carry risks if they are not reliable or if they are misused. Model risk is the ter…