Climate risk overlays unnerve model-validation teams
Risk Live: Model risk managers fear they lack the data or skills to properly test expert judgement
Banks lack both the historical data and the technical expertise to validate models for assessing environmental, social and governance (ESG) risks, model risk managers have warned. This leaves them caught between the need for overlays to fill in the data gaps, and a shortage of suitable staff to challenge qualitative judgements in ESG models.
“[There is] scepticism towards some of these more expert
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Tokenised commodities could help oil the machine
Shifting physical assets onto the blockchain eases collateral frictions, argues crypto expert
The do-it-all machine: model risk in the age of generative AI
Banks race to understand risks posed by new breed of multi-purpose bots
Top 10 op risks: AI upends risk taxonomies
AI risk enters annual poll in fifth, but firms split over treating it as a standalone risk or a cross-cutting driver
CFTC wants to regulate prediction markets. Is it up to the task?
Former officials echo state gambling authorities’ concerns over agency’s ability to police betting risks
Top 10 op risks: Playing catch-up on geopolitical risk
Op risk managers downplayed prospect of a major conflict ahead of Iran war
Main Street to Wall Street: Kalshi’s bid to go beyond sports bets
Institutional head Andy Ross’s strategy for drawing in investors and charging for ‘wisdom-of-crowds’
When trading speed outruns governance: the split-second control gap
A new form of light-driven electronics could be the next risk in market infrastructure, explains derivatives expert
Top 10 op risks: Resilience put to the test in 2026
Firms reinforce first line, ‘nth’-party diligence, scenario analysis and vendor exit plans
