arXiv:2607.04103v1 Announce Type: cross Abstract: The release of SR 26-2 marks a significant modernization of U.S. model risk management by replacing SR 11-7 with a more risk-based and materiality-sensitive supervisory framework. However, generative and agentic AI are excluded, creating an important governance challenge for banking organizations and other financial institutions. Although generative AI may not directly estimate credit risk or make underwriting decisions, its outputs can materially affect the surrounding control environment through monitoring interpretation, policy analysis, or
Source: arXiv cs.LG — read the full report at the original publisher.