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Governance

Model documentation

The written record of a model's purpose, theory, design, data sources, assumptions, limitations, and testing, maintained so that a party unfamiliar with the model's construction can understand how it works and evaluate its soundness. Complete documentation is a prerequisite for effective independent validation, not a substitute for it.

Last updated: Last reviewed by: Model Risk Directory editorial team

How the term is used in model risk management

The written record of a model's purpose, theory, design, data sources, assumptions, limitations, and testing, maintained so that a party unfamiliar with the model's construction can understand how it works and evaluate its soundness. Complete documentation is a prerequisite for effective independent validation, not a substitute for it. The exact implementation varies by institution, model type, risk rating, and governing framework. Use the linked regulatory pages and buyer guides below for scope-specific requirements.

Related glossary terms

Model validationConceptual soundnessModel governance

Guides and frameworks that use this term

GuideModel Risk Management FrameworkA model risk management framework is the documented set of policies, roles, and processes an institution uses to identify, tier, govern, and validate its models. Under SR 26-2, a sound framework covers model development and use, independent validation, and governance and controls, scaled to the institution's size and model risk profile rather than applied uniformly.GuideOCC Model Risk ManagementOCC-supervised national banks and federal savings associations are now governed by OCC Bulletin 2026-13, 'Model Risk Management: Revised Guidance,' issued jointly with the Federal Reserve and FDIC on April 17, 2026. It replaced the long-standing OCC Bulletin 2011-12, shifting to a risk-based approach while keeping the same foundational model development, validation, and governance disciplines.GuideModel Risk Management SoftwareModel risk management software centralizes a bank's model inventory, tracks validation status and lifecycle events, and automates governance workflows like tiering, revalidation scheduling, and audit-trail documentation. It replaces manual spreadsheet tracking, which becomes unmanageable once an institution has more than a handful of tiered models.