Large Bank Examination Workshop February 2026

Future Validations • Audit or Risk Management should ensure that validation firms are rotated periodically • Usually, it is appropriate for a validator to perform the validation 3 years in a row • There are efficiencies in validating a model over multiple years  Familiarity with model and implementation  Can verify implementation of recommendations • But, important to get different perspectives and prevent the validation team from getting “captured” by model developers and users.

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Exercise • Let’s go to Exercise #4: Evaluate a redacted sample bank’s model risk governance policy • Exercises Pages 26-39

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