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As I’ve mentioned in a few recent posts, even though the Fed has started lowering short rates, the longer end of the curve has remained flat and even ticked up a bit. For example, the 10-year Treasury is up about 10 basis points since the Fed lowered rates.  Despite this, mortgage rates have actually come down significantly, from around 6.9% in late May on a 30-yr fixed rate to around 6.30% in early October. What’s driving that? One big factor has been spread tightening in th

Model risk management isn’t one-size-fits-all. On October 6, 2025, the OCC issued Bulletin 2025-26 ( https://lnkd.in/diiunKRc ), reminding community banks that model risk practices, including how often models are validated, should be right-sized to an institution’s complexity, resources, and risk profile. I was glad to see the OCC explicitly say it does not expect every model to be validated every year. I’ve long believed that a thoughtful, risk-based approach beats a blanket

It looks like we are headed into a bull steepener yield curve scenario.  ↘️ Front-end treasury rates (2-year) are already coming down as markets price in multiple Fed cuts. Futures show an 87% chance for a 25pbs cut in Sept, 54% for another 25bps in October and a 43% chance for an additional 25bps at the December meeting.  ↗️ Yet the 10-year remains stubbornly high. This is likely a pivot point in the rate cycle and institutions should be stress-testing their balance sheet. ✔

But it's not a model!!  This might sound obvious to most of us as BSA/AML transaction monitoring systems have been treated as models for...

We all know the saying as it relates to model data: 🚮 garbage in, garbage out 🚮 .  🚨 But when it comes to AML models, the stakes are...

As most banks and credit unions work to calculate and finalize their Q2 2025 CECL reserves, KPMG released their Q2 CECL Pulse Check survey ( https://shorturl.at/FJaBi ) and I wanted to share some takeaways. They surveyed 23 banks and 4 finance firms and the results were not surprising. A few things that stood out: - Forecasting remains a big challenge as 88% cited economic outlooks (especially government-driven ones) as the toughest part of ACL estimation. - Economic uncertai

In an environment marked by rising funding costs, increased deposit mobility, persistent unrealized losses in bond portfolios, and...

I had the opportunity yesterday (July 2025) to present a webinar to nCino's Portfolio Analytics clients on a topic that continues to be...

The FDIC published its quarterly banking profile for Q1 2025 yesterday. While the report looks "solid" on the surface, once you dive in a...

If your institution relies on vendor models, this might save you from costly missteps and regulatory headaches. 🛑 Model Certifications ≠...

I’ve always been intrigued by crypto and the blockchain. But mostly from a distance as I'm pretty risk averse on the personal investing...

Let’s be real - no one really gets too excited about a model validation. For many model owners, it can feel like a frustrating drain on...

The OCC just released its Spring 2025 Semiannual Risk Perspective and, for community banks, it mostly backed up what we already know. 🏢...

Now that I’ve launched my own firm, ValuRisk Partners, I’ve been reflecting on some of the lessons that have shaped how I approach model...

One of the most common pitfalls in liquidity stress testing is using scenarios that escalate in severity but lack internal consistency....

For many financial institutions, CECL implementation was a heavy lift - one that checked a regulatory compliance box and moved on. But...

Intricate geometric glass ceiling reflecting the sky, creating a mesmerizing pattern of blue squares. Why Model Integrity and Scenario...

In an era marked by rapid interest rate shifts, evolving depositor behavior, and geopolitical uncertainty, financial institutions can no...

In today’s highly regulated and data-driven financial environment, models are at the heart of decision-making, from credit underwriting...