Fed orders banks to break open black boxes
Vendor models need to be properly validated for 2015 stress tests, Fed insists – but banks say they are finding it hard to get the required information
The Federal Reserve Board is pushing banks to address a traditional blind spot by properly validating third-party risk models ahead of the 2015 edition of the annual US stress tests. That is causing friction between banks and vendors, with banks complaining they are not being given the information they need - some fear they may end up using unvalidated models for the tests, which start in October this year.
A validation expert at one of the big Wall Street dealers says none of his firm's roughly
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Diversification of LDI liquidity buffers sparks debate
Funds using credit assets to top up collateral waterfall, but some risk managers are sceptical
Transforming stress-testing with AI
Firms can update their stress-testing capability by harnessing automated scenario generation, says fintech advocate
Basel stops short on wrong-way risk
New guidelines a step in right direction, but experts warn they won’t prevent another Archegos
On resilience risk, banks prepare to let the bad times roll
Lenders bolster first-line teams and upskill boards as compliance with new rules bites
Complex EU active account reporting could drive trades out of UK
Draft Emir rules might not force large volumes to move to EU, but will make compliance difficult
Strategies for navigating market volatility in the post-US election landscape
This article examines the key themes of a recent webinar, sponsored by S&P Global Market Intelligence, on market volatility following the US election, including inflation risks, commodities, geopolitical uncertainty, ESG considerations and the role of…
Risk.net’s top 10 investment risks for 2025
Fresh concerns this year include a trade war, a stock market crash and growing social discord
For banks, change risk is inevitable; managing it, optional
Regional bank survey shows steady growth of dedicated change risk functions and adoption of leading indicators
