Former regulator urges new approach to AI explainability
Ex-OCC chief Michael Hsu suggests shift from academic analysis to decision-based techniques
Former acting US comptroller of the currency Michael Hsu has called for banks and regulators to rethink how they handle the explainability challenge around large language models. He wants to see them take a more decision-focused approach that exploits the unique nature of LLMs.
Explainability – the ability to follow the logic that leads to the outputs from artificial intelligence – has been one of
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
How US regulators could stop management driving Camels
Supporters flag disconnect from other indicators; critics fear early warnings will go unnoticed
Model Risk Benchmarking 2026: explore the data
View interactive charts from Risk.net’s 44-bank study, covering model inventories, resourcing, GenAI governance, validation and regulation
A third of banks do not maintain logs for GenAI models
Risk Benchmarking study finds few banks review prompt logs systematically, with larger firms focusing on higher risk use cases
Few banks formally evaluate GenAI human-in-the-loop controls
Risk Benchmarking: G-Sibs and challengers use tools to test controls efficacy; others rely on judgement
From gatekeeper to coach: model risk bids to reinvent itself
Model Risk Benchmarking data reveals a function in flux, grappling with resource cuts, AI models, regulatory divergence
CFTC backs clearing exemption for risk reduction runs
CCP sources concerned about switch to bilateral trades, as other regulators also soften rules
0DTE options and non-banks could accelerate market risk
Risk Live: Risk managers warn trading desks in “uncharted territory” with shocks moving faster
Anthropic curbs and cost fears spur banks to shop around for AI
Risk Live: Banks increasingly wary of reliance on US models amid uncertain geopolitical environment and mounting costs