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In Risk Modeling Validation, Some Confuse the Meaning of ‘Independent’: Regulators
By Brian Monroe
printFederal financial regulators have asked more than a dozen large and midsize banks to better ensure that validations of their anti-money laundering risk models are conducted independently, say officials. Under guidance issued by the U.S. Treasury Department's Office of the Comptroller of the Currency and the Federal Reserve in April 2011, banks must quantitatively analyze their anti-money laundering (AML) risks much as they do their credit and capital risk. Banks must also test how well the risk models work with a "degree of independence from model development and use," the regulators said. But since the publication of the guidance, the...
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