The Risk Management Regulation (Circular No. 153/2018) issued by the Central Bank of the UAE (“CBUAE”) on 27th May 2018 states that banks must have robust systems and tools to assess and measure risks.
1.1.2
To set out modelling requirements for licenced banks, the CBUAE has issued Model Management Standards (“MMS”) and Model Management Guidance (“MMG”). Both MMS and MMG should be read jointly as they constitute a consistent set of requirements and guidance, as follows:
(i)
The MMS outline general standards applicable to all models and constitute minimum requirements that must be met by UAE banks.
(ii)
The MMG expands on technical aspects that are expected to be implemented by UAE banks for certain types of models. Given the wide range of models and the complexity of some, the CBUAE recognises that alternative approaches can be envisaged on specific technical points. Whilst this MMG neither constitutes additional legislation or regulation nor replaces or supersedes any legal or regulatory requirements or statutory obligations, deviations from the MMG should be clearly justified and will be subject to CBUAE supervisory review.