Standard & Poor’s Independent Model Validation Services can help your financial institution evaluate and verify the overall performance of risk-related models used for internal risk ratings system and Basel compliance.
The benefits to your organization:
An independent and objective confirmation that helps you with decision-making processes;
An evaluation of the risk model design, gaps with respect to regulatory standards, internal standards, or best industry practices;
Evaluation of the governance structure and current validation approach to better understand the roles of the key stakeholders responsible for ensuring the ongoing performance of each risk model; and
Verification of the effectiveness of the model operations with the establishment of key performance indicators (KPI).
Our solutions include:
Review of conceptual and theoretical soundness of model assumptions, inputs, outputs, functions, and overall methodology;
Confirmation of model operation and on-going monitoring of model and surrounding processes; and
Review of the model’s historical and relative performance, including backtesting, benchmarking, and the risk tolerance.
Ratings System Validation
A review of the overall performance of your internal risk rating systems to ensure accuracy and consistency.
Validation Gap Analysis
A review of your credit assessment methodologies and risk monitoring practices, collateral, and liquidity considerations to identify the critical elements of your institution's methodologies, processes, and procedures.
Quantitative Credit Models
Commercially available quantitative models for estimating ratings, probability of default, and loss given default.
Credit Risk Data
A comprehensive set of robust and consistent credit loss information; data consortia and management tools.
Assessments of Credit
Provides confidential credit scores on unrated obligors using Standard & Poor's Credit Assessment Templates.
Pricing and Profitability Services
Measure product level profitability, and create a distinct link between profitability and pricing.
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