Model risk management: Key considerations for challenging times

The state of model risk management
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Model risk management stands at the forefront of risk management for many financial services firms. In this article the current state of model risk management is reviewed by focusing on the following two areas:

  1. Model risk management was not a prominent topic a few years ago-what has changed? What has motivated the increased attention paid to this area over the last few years?
  2. Although model risk management has made significant inroads to corporate risk management functions, there have been, and still are, significant challenges in building a truly effective model risk management program. What are some of these challenges, and how are companies addressing them?