Model Specification

From Open Risk Manual

Definition

Model Specification is a document that states the operational requirements and expectations from the model, produced e.g., when the model sponsor requests the Model Development.

Usage

The model specification provides the necessary additional information to convert an Abstract Risk Model into a fully specified framework that can be turned into a Model Implementation

Examples

Issues and Challenges

  • A precise model specification is invaluable for the later stages of the Model Development and validation cycles.
  • To the degree that model specifications are hidden in implicit mandates and conventions, model performance and model validation face the additional difficulty of determining what is a reasonable standard for accepting a model.

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