Bank of England SS1/23 — Model Risk Management Principles
- Principle 1
Model identification and model risk classification
- It is on the company-wide list
- A risk level is set and signed off
- Principle 2
Governance
- One named person owns it
- Someone is making sure people use it
- Principle 3
Model development, implementation and use
- It is written down how it works
- Targets were agreed before anyone built it
- Principle 4
Independent model validation
- Someone outside the team checked it
- Someone checked it is fair
- Principle 5
Model risk mitigants
- Something watches for it getting worse
- There is a tested off switch, and someone can pull it
- A person is built into how it works