Models and Behaviour of Stakeholders
Stakeholders’ behaviour has several impacts on model risk and model management. The asset side of the balance sheet may be impacted by feedback loops on financial markets. Customer behaviour is one of the top risks faced by a company. Consequently, it must be carefully addressed in the model. In addition to these behavioural risks that have to be taken into account in the models, we also study in this chapter the behaviour of decision-makers of the company through their attitudes with respect to risk and with respect to models.