Large Bank Examination Workshop February 2026

MRM Participants

• Model reviewer  Independent unit responsible for model vetting and validation  Reports its findings to the model approver • Model approver  Responsible for assessing the model reviewer’s findings and recommendations and approving the use and/or limitation of use of any new model or changes to pre-existing models  In smaller institutions, the reviewer and approver may be combined

Source: Office of the Superintendent of Financial Institutions (Canada), Enterprise-Wide Model Risk Management for Deposit-Taking Institutions, September 2017.

113

Scope of MRM Guidelines

• Model risk management supervisory guidelines typically describe policies and processes that are applicable to any model that could materially impact the risk profile of an institution. • At a minimum, this should include all models approved for use in the calculation of inputs to regulatory capital models, as well as those that are used for internal assessments of risk.

• As we have seen, for a large and complex bank this may encompass a large number of models.

114

57

© Global Financial Markets Institute Inc.