FRB Supervisory Letter SR 09 1 on Application of the Market Risk Form

Instructions and help about FRB Supervisory Letter SR 09 1 On Application Of The Market Risk

thank you for joining this presentation on the topic of SR 11-7 which is actually the subject of managing model risk SR 11-7 is the guidance directive issued by the Federal Reserve Bank and the office of the control of the currency in April of 2011 it addresses the management of risk associated with models that are used by banks in a variety of decision-making roles it was murdered by Ray bank regulators that many years banks had increased the use of models in their business and functional activities if the model was incorrect fully constructed or misuse it could result in the bank experiencing a variety of risk consequences a model is defined by SR 11 7 as any model that constitutes the methodologies a system or an approach that is quantitative in nature and utilizes any theories techniques or assumptions to generate quantitative assessments that may have a statistical base an economic base a financial base or mathematical base the model may be used for the variety of business and fun