Moreover, during the coming years you hopefully will help to make financial risk models better. My key take-aways for these one and a half days and your future work are: First, internal models have rightfully lost their sacrosanct status, as they revealed big weaknesses during the last financial crisis. Models will never be perfect.
We always have to be aware of the underlying assumptions and their shortcomings. Second: after regulatory reform, internal models rightly continue to play a big role, but now a complementary one. Limits have been set. But we shouldn’t overreact. It is also important to maintain incentives for banks with regard to a risk-sensitive framework.