CMS Sept 2022

Internal Use Only

Model Identification & Inventory

Model Definition: • A quantitative method, system, or approach that applies statistical, economic, financial, or mathematical theories, techniques, and assumptions to process input date into quantitative estimate. (SR 11 ‐ 7) • Also covers quantitative approaches whose inputs are partially or wholly qualitative or based on expert judgement, provided that the output is quantitative in nature.

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Internal Use Only

Model Identification & Inventory Tool Definition: • Comptroller’s Handbook on Model Risk Management states: “In contrast to a model, a quantitative tool not meeting the definition of a model described in the MRM Supervisory Guidance may apply deterministic rules or algorithms to process information and produce outcomes defined by the deterministic rules.” • “For example, a tool can include spreadsheet calculations using algebraic formulas, such as summation, or values for which the output is certain.”

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