AI Governance Engineer
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Model risk management

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The banking-supervision practice of validating models for conceptual soundness, monitoring and outcomes analysis under effective challenge. SR 11-7 set the US tradition until SR 26-2 superseded it on 17 Apr 2026 1, and SR 26-2 leaves generative and agentic AI models out of its scope 2. A neighbour of this discipline, extended here to runtime behaviour and agents.

Developed in
ch. 14, Independent validation and model risk management
ch. 21, Sector rules that already reach AI
ch. 01, The disambiguation cluster
Chapters
ch. 01, Definition · ch. 02, Why Now · ch. 13, Risk Management · ch. 14, Development · ch. 21, AI Laws Worldwide
Contrast with
Risk management
Source
2 numbered references, listed below

Where it is used

6 chapters of the Body of Knowledge use the term. Each link opens the first section that does.

Model risk management: mentions per chapter12 mentions of the term across 6 of the 23 chapters of the Body of Knowledge; the chapters the glossary cross-references are drawn solid.Cross-referenced chapterOther chapterCross-referenced, not named01 Definition: 3 mentions01 Definition302 Why Now: 1 mention02 Why Now110 Reading List: 1 mention10 Reading List113 Risk Management: 3 mentions13 Risk Management314 Development016 Fairness & XAI: 1 mention16 Fairness & XAI121 AI Laws Worldwide: 3 mentions21 AI Laws Worldwide3No mentions in the other 16 chaptersSource: the Body of Knowledgev0.5.0
Model risk management: mentions per chapter12 mentions of the term across 6 of the 23 chapters of the Body of Knowledge; the chapters the glossary cross-references are drawn solid.Cross-referenced chapterOther chapterCross-referenced, not named0001 Definition: 3 mentions30102 Why Now: 1 mention10203040506070810 Reading List: 1 mention110111213 Risk Management: 3 mentions313141516 Fairness & XAI: 1 mention1161718192021 AI Laws Worldwide: 3 mentions3212223Source: the Body of Knowledge v0.5.0
Mentions per chapter How often each chapter names the term, with the chapters the glossary cross-references drawn solid. The longest bar is where to read the term in use; bars spread across many chapters mark a term that runs through the discipline.
Mentions as a table
Mentions of Model risk management per chapter
ChapterMentionsCross-referenced
00 Preface0No
01 Definition3Yes
02 Why Now1Yes
03 Values & Principles0No
04 The Stack0No
05 Patterns0No
06 The Role0No
07 Maturity Model0No
08 Regulatory Map0No
10 Reading List1No
11 AI Defined0No
12 Governance Program0No
13 Risk Management3Yes
14 Development0Yes
15 Deployment0No
16 Fairness & XAI1No
17 Incidents0No
18 EU AI Act0No
19 Privacy & AI0No
20 Existing Law0No
21 AI Laws Worldwide3Yes
22 Principles & Standards0No
23 AI Agents0No
Model risk management: related terms and patternsThe term at the centre; related terms on solid edges, the terms it is contrasted with on dashed edges, and the patterns that use it most in the colour of their layer.RelatedContrastModel risk managementRelated terms (2)Agent (agentic AI) · RelatedAgent (agentic AI)Effective challenge · RelatedEffective challengeContrast with (1)Risk management · ContrastRisk management
Model risk management: related terms and patternsThe term at the centre; related terms on solid edges, the terms it is contrasted with on dashed edges, and the patterns that use it most in the colour of their layer.RelatedContrastRelated terms (2)Agent (agentic AI) · RelatedAgent (agentic AI)Effective challenge · RelatedEffective challengeContrast with (1)Risk management · ContrastRisk managementModel riskmanagement
The term's neighbourhood Terms related to this one on solid edges, terms it is often confused with on dashed edges, and the patterns that use it most in the colour of their layer. Follow a dashed edge to check the distinction before you use either term.
Neighbourhood as a table
Neighbourhood of Model risk management
FamilyItemRelation
Related termsAgent (agentic AI)Related
Related termsEffective challengeRelated
Contrast withRisk managementContrast
  • Effective challenge

    Critical analysis of a model by objective experts with the expertise, independence and organisational standing to force change.

  • Agent (agentic AI)

    An AI system that acts (browses, executes code, calls APIs, moves data or delegates to other agents) under delegated authority, rather than only producing text.

Sources

  1. [1] SR 26-2, Revised Guidance on Model Risk Management (issued 17 Apr 2026 by the Federal Reserve, OCC and FDIC; supersedes and replaces SR 11-7 of 4 Apr 2011 and SR 21-8; effective challenge). Board of Governors of the Federal Reserve System. 2026-04-17. https://www.federalreserve.gov/supervisionreg/srletters/SR2602.htm (verified: primary)
  2. [2] Revised Guidance on Model Risk Management, attachment to SR 26-2 (footnote 3: generative AI and agentic AI models "are not within the scope of this guidance"; the principles apply to traditional statistical and quantitative models and non-generative, non-agentic AI models). Federal Reserve, OCC and FDIC. 2026-04-17. https://www.federalreserve.gov/supervisionreg/srletters/SR2602a1.pdf (verified: primary)

Definitions of legal terms paraphrase the cited text, which governs. Dated statements are as of .

Cite this term

García Aibar, J. (2026). Model risk management. In AI Governance Engineering: The Thesis & Body of Knowledge (v0.5.0), Glossary. https://doi.org/10.5281/zenodo.22956197. https://aigovernanceengineer.com/glossary/model-risk-management. CC BY 4.0

BibTeX

@misc{aige2026modelriskmanagement,
  author  = {Jorge García Aibar},
  title   = {{Model risk management}},
  note    = {Glossary, AI Governance Engineering: The Thesis \& Body of Knowledge, version 0.5.0},
  year    = {2026},
  doi     = {10.5281/zenodo.22956197},
  url     = {https://aigovernanceengineer.com/glossary/model-risk-management}
}