Technical Review of Internal Models (TRIM) Making the Most of a Difficult Task at a Difficult Time

In 2017 and 2018 the European Banking Authority (EBA) will devote significant resources to a formal and structured review of credit, credit counterparty and market risk models being used by banks that fall under the single supervisory mechanism. This exercise, known as TRIM (Technical Review of Internal Models), is intended to provide firm foundations for the ongoing use of internal models to set capital requirements for European banks. TRIM launched in 2015 and is scheduled for completion in 2019, with the majority of bank interactions taking place in the next 12 months.

Technical Review of Internal Models (TRIM) Making the Most of a Difficult Task at a Difficult Time
Technical Review of Internal Models (TRIM) Making the Most of a Difficult Task at a Difficult Time

Contents

  1. Introduction
  2. Consideration 1: Regulatory Requirements for Risk Data are Converging with Audit Requirements
  3. Consideration 2: It’s not the Board’s Problem Anymore. Risk Analytics Teams Work for Regulators now
  4. Consideration 3: As differentiation in Risk Models is Removed, has Economic Capital Outlived its Usefulness?
  5. Consideration 4: Planning for the Impact of TRIM on Capital Management and Customer Pricing
  6. Consideration 5: Accelerating the Future of Retail Credit Risk Management.
  7. How TORI Can Help