“Although model risk management is in internal process, a bank may decide to engage external resources to help execute certain activities related to the model risk management framework. These activities could include model validation and review, compliance functions. or other activities in support of internal audit. These resources may provide added knowledge and another level of critical and effective challenge, which may improve the internal model development and risk management process.” – Supervisory Guidance on Model Risk Management, OCC April 4, 2011 There are certain circumstances where a bank or its board needs to utilize an experienced external resource to help develop and implement AL best practices and procedures. These circumstances might include:
- Migration from a less sophisticated ALM to a more robust one
- Change in core processors
- Management changes
- Regulatory mandates
- Business practice or product offering change
- Balance sheet composition shift
R2Metrics consultants have the ability to help your institution transition though any situation. We present “ALCO 101” as a learning session to ALCO and board members to ensure all board members are up to date on current regulatory guidance and necessary risk management techniques.