De-Biasing Financial Models

By Francesca Bergamaschi, Anna Slodka-Turner, Steve Lindo

A featured article of our April 2020 edition of PRMIA's Intelligent Risk quarterly newsletter


A body of literature and social media has emerged in recent years, calling attention to the possibility that  some  models  used  by  financial  institutions  to  analyze  risks  and  make  important  decisions  may  contain unintended biases. Proving or disproving the existence of unintended bias in a financial model and  determining  the  potential  negative  consequences  of  such  biases  has  been  a  challenge.  In  this  article we argue that testing financial models for unintended biases may be a valuable component of model risk management.


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About the Intelligent Risk

Intelligent Risk is PRMIA's quarterly publication, bringing all PRMIA members free access to knowledge and information about risk management for financial institutions as well as current information on PRMIA chapters, committees, academic partners, news and events.

Individual articles from each edition are published under our members only Risk Library resources section. PRMIA is sharing select articles from the April 2020 edition with the public. Get more articles like this by joining PRMIA today.

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