Large Bank Examination Workshop February 2026

Basel Model Risk Guidelines • Must have a robust framework for the subsequent ‘on-going’ validation activities that are required for continued regulatory compliance. • A consistent, and replicable model validation process must be implemented. • Validation function is performed by an independent group; independence and objectiveness are essential for a robust model validation process.

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Basel Model Risk Guidelines • Confirmation of the conceptual soundness and initial risk quantification of the model’s design, concept, methodology, and assumptions • Confirmation of model’s operations, replicability, override and exceptions monitoring, monitoring of model KPIs, data integrity, and the use test • Annual examination of overall performance of the model  Backtesting  Benchmarking  Annual health check

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