medium · FRM Part 1 Foundations of Risk Management
A Chief Risk Officer (CRO) at a global bank discovers that a new machine-learning model for credit scoring is producing highly accurate results but its decision-making logic is a 'black box'.
Which aspect of ERM governance is most acutely challenged here?
- Model risk management and validation
- Regulatory capital arbitrage
- The three lines of defense
- Risk aggregation across types
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More FRM Part 1 Foundations of Risk Management practice
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