2024 Fhfa Model Risk Conference

2 min read 11-01-2025

The Federal Housing Finance Agency (FHFA) will once again host its annual Model Risk Conference in 2024. While specific dates and agendas are yet to be released, past conferences provide a strong indication of what attendees can expect. This year's event promises to be crucial for financial institutions and model risk professionals, focusing on the ever-evolving landscape of model risk management.

Key Themes to Anticipate

Given recent regulatory changes and ongoing industry challenges, several key themes are likely to dominate the 2024 conference:

AI and Machine Learning in Model Validation:

The increasing integration of artificial intelligence and machine learning (AI/ML) in financial modeling presents both opportunities and significant risks. Expect discussions on robust validation techniques tailored to these new technologies, addressing issues like explainability, bias detection, and the potential for unforeseen vulnerabilities.

Climate Change and Model Risk:

The growing awareness of climate-related financial risks will undoubtedly feature prominently. The conference will likely delve into how models incorporate climate-related factors, such as physical risks (e.g., extreme weather events) and transition risks (e.g., policy changes affecting carbon-intensive industries), and the challenges of accurately assessing their impact.

Data Governance and Model Transparency:

Robust data governance is paramount for reliable model outputs. The conference will likely highlight best practices for data quality management, data lineage tracking, and strategies for enhancing model transparency and auditability. This will be especially important in navigating regulatory scrutiny and fostering trust.

Model Risk Governance and Culture:

Effective model risk management necessitates a strong governance framework and a risk-aware culture within financial institutions. Discussions will likely focus on strengthening risk oversight, enhancing communication between model developers, validators, and senior management, and promoting a culture of responsibility.

Importance for Financial Institutions

Attending the FHFA Model Risk Conference is highly beneficial for financial institutions. The event offers a unique opportunity to:

Network: Connect with regulators, industry peers, and leading experts in model risk management.
Learn: Gain insights into best practices and emerging challenges in model risk.
Comply: Stay abreast of the latest regulatory expectations and guidance.
Improve: Identify areas for improvement in their own model risk management frameworks.

The conference provides invaluable insights into the evolving regulatory landscape and practical strategies for mitigating model risk. Financial institutions should actively participate to ensure compliance and maintain the stability of the financial system.

Conclusion

The 2024 FHFA Model Risk Conference is a pivotal event for all stakeholders in the financial industry. By engaging with the presented topics, institutions can strengthen their model risk management practices and contribute to a more resilient and robust financial system. As further details emerge, staying updated on the official FHFA announcements will be crucial.