Bot’s job? Quants question AI’s model validation powers
But supervisors cautiously welcome next-gen model risk management
Can bots police bots? It’s a conundrum at the center of many a sci-fi thriller. But now the real-world question is whether bank bots can validate their own models—or perform the crucial job of ensuring risk management models are fit for purpose. Some quants don’t think they can.
While banks already deploy artificial intelligence (AI) for many tasks—such as recognizing patterns in financial data, calculating risk sensitivities or finding the optimal execution for a trade—when it comes to model
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