Bot’s job? Quants question AI’s model validation powers
But supervisors cautiously welcome next-gen model risk management
Can bots police bots? It’s a conundrum at the centre of many a sci-fi thriller. But now the real-world question is whether bank bots can validate their own models – or perform the crucial job of ensuring risk management models are fit for purpose. Some quants don’t think they can.
While banks already deploy artificial intelligence (AI) for many tasks – such as recognising patterns in financial data, calculating risk sensitivities or finding the optimal execution for a trade – when it comes to
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 [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] 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 [email protected]
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 [email protected]
More on Risk management
Banks feel regulatory heat on op resilience
Op Risk Benchmarking: supervisors dial up reporting expectations and on-site inspections
BofA’s rates revamp leans into multi-strategy boom
New rates head Laura Chepucavage prioritises collateral efficiency, e-trading and central risk book for enlarged rates, futures and financing unit
Revolutionising credit surveillance: part two
Does GenAI live up to the hype? How prioritising AI and digitisation projects reveals data as the power behind AI initiatives
Elevating risk management to a strategic partner in investment decision-making
How risk management is evolving from a compliance role to a strategic partner, highlighting such themes as collaboration with portfolio teams, forward-looking approaches, advanced analytics and integrating emerging risks, enabling firms to navigate…
Withholding tax trips up Eurex agency clearing model
Clearing members rely on CCP to resolve potential problem with German tax authorities
Thin-skinned: are CCPs skimping on capital cover?
Growth of default funds calls into question clearers’ skin in the game
Independent audits drive compliance in FRTB data solutions
The EU and the Basel Committee have introduced strict audit standards for data vendors to uphold the FRTB rules. With deadlines approaching, audited solutions are critical for banks to ensure compliance, minimise NMRFs and reduce capital requirements
New CME guidance to drive tighter margin call management
Clearing house rule clarified to limit the use of grace periods to cases of admin/operational errors only
