Press Release: Agencies Issue Revised Model Risk Guidance

The revised guidance clarifies that model risk scales with complexity, but the real governance failure is structural: banks lack a single artifact linking each model to its named owner, documented assumptions, validation evidence, and approval history. When model decisions live in spreadsheets and presentations rather than as engineered records, examiners find undocumented overrides, stale validations, and no clear owner when a model fails. The lesson is operational—model governance is not a policy exercise but a decision-capture discipline that produces a queryable record of every deployment, assumption change, and periodic review, owned by a named individual and traceable to board-level risk appetite.