Upon Further Analysis — Archives
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How to Look at Financial Risk Models
Models play an essential role in financial decision making. Financial institutions and their regulators use models to forecast, identify exposures, and quantify risks. Whether you’re a Treasurer, a risk manager, or a regulator, it’s important to understand how models work and some of their pitfalls. The idea isn’t to turn people into modeling experts, but…
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Are We Ready for Robo-Examiner?
Some observers have touted the promise of artificial intelligence (AI) in improving the quality of bank supervision. Recent staffing cutbacks at bank regulatory agencies have given this issue more immediacy. Can robo-examiners come to the rescue? More generally, what are some of the more promising applications of AI in bank supervision? And what are the…
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AI-Generated Supervisory Letter
As a test, I used ChatGPT to generate a supervisory letter given a set of facts. I didn’t use the bank’s name, but the findings corresponded to those of an August 21, 2021, examination of Silicon Valley Bank. The query also used Uniform Bank Performance Report (UBPR) data as of June 2021. Here is the…