How should a model inventory be structured under SR 11-7?

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AcadiFi · Accepted Answer

A compliant model inventory is the single source of truth for model risk. It must capture every model meeting SR 11-7's definition: 'a quantitative method, system, or approach that applies statistical, economic, financial, or mathematical theories... to process input data into quantitative estimates.' Core attributes to capture: 1. Identification. Unique model ID, name, version, status (in development, production, retired). 2. Classification. Business line, model purpose (e.g., CCAR PPNR, fraud detection, PD estimation), regulatory use (Basel IMA, CCAR, DFAST, IFRS 9, AML). 3. Tier. Materiality-based classification driving validation intensity. 4. Ownership. Model owner, developer, validator, approver — with email addresses and backup contacts. 5. Technical metadata. Methodology, inputs, outputs, dependencies, upstream/downstream models. 6. Validation status. Last validation date, findings (open/closed), next scheduled review, limitations in force. 7. Performance monitoring. KPIs tracked, breach history, backtesting results. 8. Documentation links. Development document, validation report, user guides. ```mermaid flowchart LR A[Model
Intake] --> B[Inventory
System] B --> C[Tier
Classification] C --> D[Validation
Plan] D --> E[Annual
Review] E --> F[Findings
Tracker] ``` A mature inventory uses a dedicated GRC platform (Archer, ServiceNow GRC, Riskonnect) with API integration to model execution environments. Every production run logs to the inventory automatically, so the MRM team has real-time visibility. A concrete example: Ember Mutual Holdings migrated from an Excel-based inventory of 650 models to an integrated platform. They now auto-discover new models via code repository scans, trigger intake workflow when any script hits production, and generate the annual validation plan from tier and last-validation date. FRM exam: validation scope and frequency scale with tier, and the inventory must be complete — hidden EUCs (end-user computing) in spreadsheets are a common audit finding.

How should a model inventory be structured under SR 11-7?

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