Models must undergo rigorous testing during development to ensure they are fit for purpose.
While the statement was finalized in 2023, the foundation was laid in through the CP6/22 Consultation Paper. Most firms were expected to have implemented these principles by May 2024. SS1/23 – Model risk management principles for banks Download Ss123 2022 zip
When models have known limitations, firms should use Post-Model Adjustments (PMAs) to account for latent risks. Implementation Timeline Models must undergo rigorous testing during development to
A team independent from the model developers must perform a critical review of the model’s performance and assumptions. Download Ss123 2022 zip
A designated Senior Management Function (SMF) must be accountable for the MRM framework.