easy · Frm Part 2 Current Issues
A bank calculates the Population Stability Index (PSI) to monitor an AI credit model. The distribution of scores has shifted such that the PSI is now 0.14.
What is the most appropriate governance response according to standard thresholds?
- Recalibrate the intercept only, as PSI measures only calibration and not discrimination.
- The model should be immediately retired and replaced with a random classifier.
- Conduct a moderate shift investigation to determine if the model's training assumptions still hold.
- No action is required as the model is considered perfectly stable below 0.25.
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