Model Validation and Review

Client: Newly-launched deposit-taking bank with $50M in capital seeking audit

A newly-launched deposit-taking bank with $50M in capital hired Sapling to audit a previously-developed model showing the operations and finances of the bank over the 10 years across numerous business lines, as well as corresponding regulatory ratios.

3 Key Insights:

We performed a line-by-line calculation review focusing on the liquidity coverage ratio and the capital adequacy ratio


We included a comparison against regulatory requirements and documents, a review of selected inputs, and a review of the mechanics of calculations


We also performed a scenario review, which included a review of inputs selected to stress the model, attempts to recreate scenario outputs. As a result, we were able to review possible model glitches

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