New BoE rules could force banks to cull multiplying models

Risk Live: Model risk management to become more labour-intensive, as model definition is broadened

The Bank of England’s final rules on model risk management will fuel an increased workload for validation teams, as a result of tougher governance requirements and broad definitions that will capture activities that banks had not previously considered as modelling. Consequently, banks may have to cut back on the models they are using, experts have warned.

“We know we have to do it,” said Nadia Bouzebra, head of model risk management at Close Brothers, speaking of the new requirements on the