first_imgAlthough the National Credit Union Administration has not issued any overarching guidance on model risk management, it has published various comments on model validator independence and the importance of a risk-focused approach. Absent more explicit NCUA direction, many credit unions have adopted other regulators’ supervisory guidance on model risk management, e.g., the Office of the Comptroller of Currency’s 2011-12 bulletin or the Federal Reserve’s SR 11-7 supervisory letter. Regardless of the standard, resource limitations frequently make independent, competent, risk-focused model risk management a challenge for credit unions.This article is a guide for deciding between staffing a fully independent internal model validation department, outsourcing the entire operation, or a combination of the two.Striking the appropriate balance is a function of at least four factors:control and independence,cost,financial risk, andexternal (regulatory, market, and other) risk considerations. continue reading » 13SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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