Large Bank Examination Workshop February 2026

Model Validation Policy • Firms that rely on financial models to measure, monitor, and manage risk should have formal model validation policies:  Model and model risk definitions;  Assessment of model risk;  Acceptable practices for model development, implementation, and use;  Appropriate model validation activities; and  Governance and controls over the model risk management process.

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Scope of Policy

• Roles and Responsibilities • Model Inventory and Categorization

• Model Implementation • Model Documentation • Model Validation

• Reporting and Monitoring Validations • Retention and Safekeeping of Models

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