Establishing Model Risk Management
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Table of Contents
1. Background .........................................................................................................5
2. Definitions ...........................................................................................................6
2.1. Model .....................................................................................................................6
2.2. Model Risk ..............................................................................................................6
2.3. Model Risk Management .........................................................................................7
2.4. Tools and End User Computing ................................................................................7
2.5. Vendor Models ........................................................................................................7
2.6. Model Life Cycle .....................................................................................................8
3. Model Risk Management Goals ..........................................................................10
4. Model Usage ......................................................................................................11
5. Model Risk Management Framework ..................................................................12
5.1. Introduction .........................................................................................................12
Basic Framework ..................................................................................................................................12
Principles of Effective Challenge ...........................................................................................................12
5.2. Framework Components .......................................................................................12
5.3. Organizational Structure .......................................................................................14
5.4. Framework Delivery ..............................................................................................15
5.5. Inventory ..............................................................................................................15
5.6. Data .....................................................................................................................16
5.7. Vendor Models ......................................................................................................16
6. Conclusion .........................................................................................................18
http://ccro.org © Copyright 2025, CCRO. All rights reserved. 2
Table of Contents
1. Background .........................................................................................................5
2. Definitions ...........................................................................................................6
2.1. Model .....................................................................................................................6
2.2. Model Risk ..............................................................................................................6
2.3. Model Risk Management .........................................................................................7
2.4. Tools and End User Computing ................................................................................7
2.5. Vendor Models ........................................................................................................7
2.6. Model Life Cycle .....................................................................................................8
3. Model Risk Management Goals ..........................................................................10
4. Model Usage ......................................................................................................11
5. Model Risk Management Framework ..................................................................12
5.1. Introduction .........................................................................................................12
Basic Framework ..................................................................................................................................12
Principles of Effective Challenge ...........................................................................................................12
5.2. Framework Components .......................................................................................12
5.3. Organizational Structure .......................................................................................14
5.4. Framework Delivery ..............................................................................................15
5.5. Inventory ..............................................................................................................15
5.6. Data .....................................................................................................................16
5.7. Vendor Models ......................................................................................................16
6. Conclusion .........................................................................................................18
