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Model risk tier calculator, for OSFI E-23.
Answer eight questions about a model. See its risk tier, what drove it, and what that tier usually sets for review, approval and monitoring.
Answer all eight factors to see the tier · 0 of 8 answered
How it works And what it is not
The eight questions are the factors OSFI’s Guideline E-23 names for a model risk rating in Principle 2.2: two quantitative, six qualitative. Each answer scores 1, 2 or 3. A total of 18 or more is High, 13 to 17 Medium, 12 or less Low. Three floors lift a model that the score alone would place too low, the way many banks do in their own policies.
E-23 prescribes no formula, so this is an illustration, not OSFI’s method or a rating of your model. Use it to start a conversation, test a draft methodology, or explain tiering to a committee. Your own policy sets the weights and thresholds, and your second line checks the result. For the background, read what model risk tiering is.
Questions people ask
Does OSFI E-23 prescribe a model risk rating formula?
No. E-23 asks for a risk rating based on clear, measurable criteria covering quantitative and qualitative factors, and leaves the method to each institution. This calculator is one simple, illustrative shape to start from.
What factors does E-23 name for a model risk rating?
Quantitative factors such as the importance, size and growth of the portfolio and the potential operational, security or financial impact; qualitative factors such as business use or purpose, complexity or autonomy, reliability of data inputs, customer impact and regulatory risk.
Is the rating based on inherent or residual risk?
E-23 asks for a rating of inherent model risk, before controls. Controls and mitigants then shape residual risk, usage limits and monitoring.
Can I change the thresholds?
In your own policy, yes, and you should: the 13 and 18 point thresholds and the three floors here are examples. What matters is that each tier triggers different work and that the criteria are written down and applied the same way to every model.
Is anything I enter stored or sent?
No. The calculator runs entirely in your browser. The CSV download and the copied text are made on your device.