Accounting, Legal and Infrastructure
Governance and Controls
The three lines model, new product approval, limit frameworks, model risk management and independent price verification.
Introductory1 pagePractitioner4 pages
1Governance
- IntroductoryThe Three Lines ModelThe three lines model assigns the role of managing risk and the role of checking that the management works to separate parts of the organization.
- PractitionerNew Product ApprovalIn general, a product should not be traded until management and relevant personnel understand it and can build it into risk measurement and control systems.
- PractitionerLimit FrameworksRisk appetite is the types and amount of risk management accepts, and a limit is a numerical upper bound that allocates it to units and risk types.
- PractitionerModel Risk Management: SR 11-7 and the JFSA PrinciplesModel risk is the risk that a decision based on a model error or inappropriate model use leads to an undesirable outcome.
- PractitionerIndependent Price Verification (IPV)IPV is a control in which people or units independent of the front office recheck valuations against independent prices, guarding against bias toward the front office's estimates.