Validating financial models

This service is the most robust solution possible for meeting business and regulatory needs and addresses all aspects of the Supervisory Guidance on Model Risk Management (SR 11-7).

We provide you with a comprehensive review of the conceptual capabilities and limitations of the model, as well as a detailed technical validation of all model specifications from data inputs, category attributes and assumptions inputs to risk reporting.

We effectively challenge model forecast accuracy through multiple model tests and outcomes analysis.

We fully assess the adequacy of your model governance solution including ALCO/ALM policies, IRR limits, model control environment, ongoing model monitoring plans and model administration actions.

Capital stress test (CST) models include internally-developed credit loss, PPNR, and capital reporting models, as well as vendor-based aggregator models supporting both DFAST and CCAR applications.

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To validate CST models, Mountain View employs an end-to-end review process that is thorough, model-centric and entirely consistent with current supervisory expectations.We evaluate the overall modeling solution as to whether it is an appropriate tool for gathering relevant risk positions, identifying risk correlates, assigning risk metrics and parameters, and converting them to stressed outcomes.The second component, the model technical validation, evaluates the CST model’s internal construction and potential to produce accurate, reasonable stress estimates and outcomes.Our systematic approach to model validation ensures that all dimensions of your CST model development, implementation, and use (conceptual design, technical and statistical correctness, outcomes accuracy and controls) are effectively challenged and affirmed, thereby empowering you to meet your DFAST and CCAR compliance and capital management requirements.Mountain View will perform a comprehensive validation of all models that support your capital stress testing regimen.Mountain View's comprehensive ALM model validation includes a formal model ranking relative to peer model implementations, with detailed model findings ranked in order of importance or model risk materiality.Based on our years of validation expertise, we also provide clients additional insight with advanced industry practices to offer added perspective and guidance.Mountain View's technical ALM model validation service focuses on providing a complete process verification validating all technical aspects of your ALM model.This includes evaluation of the basic data inputs and all category set-up attributes for each chart of account category.Our CST model validation process is comprised of four primary components including model conceptual assessment, model technical validation, model forecast validation and model governance review.The first validation component, the model conceptual assessment, evaluates the conceptual capability of each CST model to meet current regulatory mandates and relevant business needs.


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