The Superintendency of Banking, Insurance and AFP (SBS) approved the Model Risk Management Regulationswhich establishes minimum guidelines to mitigate the risks derived from the use of models used in the management of credit, market, liquidity, operational, and money laundering and terrorist financing risks of companies in the financial and insurance system.
Through resolution No. 053-2023, published in the official newspaper El Peruano, the SBS makes this step towards a new directive official, which seeks to continue with the process of incorporating the best international practices into the regulatory framework of the systems supervised.
How does it work? The entities under the supervision of the SBS use models to manage their risks, which contributes to reducing costs, as well as making better and faster decisions.
However, as in any activity, the use of models generates some risks derived from failures associated with their development and validation, as well as their implementation and expected use, which need to be mitigated.
The new regulation establishes the definition of the model and model risks, the corporate governance framework for model risk management and the minimum guidelines for the development, validation, implementation, use and monitoring of models.
“Its application will be gradual, from December 2023 to January 2026, considering the risks that are managed with the models and the categorization of the models used,” the SBS sent.
Source: Larepublica
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