Large Bank Examination Workshop February 2026

Resolving Validation Findings • Any issues or findings from a model validation need to be assigned for resolution to specific parties by specific dates • Usually, the business unit that owns the processes are responsible for this resolution.  This can be the model developer if the finding is related to the math and mechanics of the model  More likely the issues are going to be around assumptions, so model users are usually tasked with resolving these • Risk management or internal audit are usually tasked with ensuring that resolutions are addressed timely, but are not responsible for implementing procedures for resolution. • Ensure that similar findings/issues are not outstanding across multiple iterations/years of the validation.

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Exercise • Let’s go to Exercise #3: Case Study: Review a redacted model validation for a commercial bank’s risk model. • Exercises Pages 11-25

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