Large Bank Examination Workshop February 2026

Internal Audit Assessment • Inspect relevant regulatory requirements and evaluate validation report for compliance. • Benchmark validation report with best practices. • Address any outstanding issues in the Management Response to the recommendations from each validation.

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Mission Critical Models • In the case of mission-critical models managed externally by a vendor, the institutions should require the vendor to provide its model certification or quality assurance results. • Certification of math and mechanics of model different from a validation of a specific instance of a model - see handout example (Exercises Pages 8-10) • If the vendor considers such results too revealing of proprietary mathematics and code, it can provide evidence of the results and of the steps taken to generate them.

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