Euro regulators may look to cull internal credit risk models
Fewer models and higher capital requirements seen as likely outcomes of SSM review
European banking supervisors are worried about the ability of banks to properly maintain and validate their internal models for credit risk, and could use a multi-year review of internal models to cut the total number of models in operation, sources say.
Regulators have become increasingly anxious about banks’ oversight of models in recent years. The trend has been particularly marked in the US, where the Federal Reserve Board issued guidance in 2011 calling for more robust model risk management
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