Validating financial models dating texting rules
The validation process needs to monitor all aspects that can have a significant impact on the quality of the forecast produced by the model.Besides monitoring the actual risk model, this involves making an assessment of the valuation models, the market data and the data describing financial instruments used in the model.This is to ensure that our client passes his upcoming regulatory examination.The models in question feed into the bank’s CCAR stress test, and have to be shown to work properly under stress.
For example, we deliver the model documentation for the internal model validation and prepared the presentation to explain the approach to the FED.
STEVE BLANK: Entrepreneurs treat a business plan, once written, as the culmination of everything they know and believe.
All they need to do is add money and magically that five-year forecast in Appendix A will simply happen if they execute to the plan.
In short, what would you say are the key and critical challenges in this area at the moment?
In my experience, problems with data integration across different IT systems and business lines are some of the biggest challenges facing stress testing professionals.The case study will demonstrate how to quantify changes in growth, unemployment or interest rates in any European country in response to the British shock.