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Applied and bridge studies study record
Decision Accounting & recordsDecision Accounting and Bank Model-Risk Regimes: A Clause-Level Crosswalk to SR 11-7 and BCBS 239
STATUS · Manuscript in progressSSRN · Not yet posted
MECHANISM
Identify the incentive structure and the condition that would falsify the claim.
RULE CHANGE
Read the intervention only after the paper shows how the current payoff space fails to support system welfare.
READER USE
Use the summary to see where private gain creates system exposure, then check the study record.
Reading βW
βW means annual system-welfare loss divided by annual industry revenue Π. Revenue is the denominator, never profit, earnings, or net income; ΔW and Π must use the same domain, same time period, and same activity boundary. See the βW methodology manual.
Contribution — what this adds to the conversation
The paper gives a clause-level crosswalk, identifies gaps, and discusses the implications for supervisory practice. The analysis is proposed and not yet peer-reviewed. Keywords: Decision Accounting, SR 11-7, BCBS 239, model risk management, risk data aggregation, Missing System Theory, Missing System Theory, Hollow Win, system-welfare beta, bank supervision JEL Classifications: G21, G28, G32, C60, D81 --- 1
WHAT'S NEW · DA records are complementary to SR 11-7 and BCBS 239, not substitutive. DA provides partial support for SR 11-7 development documentation, implementation documentation, independent review, and governance. DA is orthogonal to SR 11-7 model definition, validation, and ongoing monitoring. DA provides partial support for BCBS 239 risk reporting principles (accuracy/clarity and comprehensiveness) and supervisory review.
The paper examines whether Decision Accounting (DA) records satisfy the documentation requirements of two major banking supervisory regimes: SR 11-7 (model risk management) and BCBS 239 (risk data aggregation). Through a clause-level crosswalk, it finds that DA records are complementary, supplying a decision-reasoning layer that both regimes assume but do not require. The paper formalizes this complementarity and discusses implications for supervisory practice, including the recursive governance of DA scoring models under SR 11-7.