
Hidden benefits of the Fed’s model validation push
Incidents such as the London Whale losses show an overhaul of model validation should be welcomed, not maligned

Lourenco Miranda is head of model risk management, Americas, and risk unit lead for capital and resolution management at Societe Generale Corporate & Investment Banking in New York
Model risk management has long been seen by bank higher-ups as an irksome, bureaucratic cost centre, draining profits from trading desks, tolerated only to serve the demands of the regulatory machine. But it shouldn't be: when properly implemented and executed, a sound model validation framework should be seen as a
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