Document background
The Model Risk Assessment document is a critical risk management tool required by Hong Kong financial regulators, particularly the HKMA, for organizations using quantitative models in their operations. It should be used whenever a new model is implemented, significant changes are made to existing models, or as part of regular review cycles. The assessment comprehensively evaluates model risks, including development methodology, data quality, validation procedures, and control effectiveness. This document is particularly important in Hong Kong's highly regulated financial sector, where model risk management is subject to strict regulatory oversight. The assessment helps organizations demonstrate compliance with local regulations while providing a structured approach to identifying and managing model-related risks.
