guidance

Model Management Guidance — AI/ML Model Risk

Issuing bodyCBUAE
CountryUAE
RegionFederal
model risk managementAI governancefinancial modeling

This CBUAE guidance outlines principles for managing risks associated with AI/ML models used by financial institutions. It provides specific guidance on various model types, including rating, PD, LGD, macro, interest rate risk, and net present value models. The document emphasizes governance, data analysis, model construction, validation, and monitoring.

Key requirements
  • Establish a robust governance framework for model development, implementation, and use.
  • Implement thorough data collection and analysis processes to ensure data quality and relevance.
  • Conduct regular model validation and monitoring to assess performance and identify potential weaknesses.
Applies to: Financial institutions operating in the UAE and regulated by the CBUAE
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