Issues and Challenges in Model Risk Quantification - A Research Study /

Abstract

Model risk management stands at the forefront of risk management for many of today’s financial services firms. It can be understood as the risk of model failure due to incorrect inputs, flawed assumptions, and incorrect model design or model misuse. After the Global Crisis in 2008, many financial institutions have concentrated on model risk concepts to understand and evaluate the impact of model failures and ways to avoid the same.