A-P07 · PROCESS · scenariosGRA dossier · service level R0
GRAAI and Financial Model RiskIn development
Sector scenarios

Published scenarios

Sector-level scenarios for AI and Financial Model Risk are published here with their assumptions and limits. They describe aggregate exposures; they are not forecasts and not investment advice.

Publisher
The Global Risks Alliance
Field
Artificial intelligence, Financial stability
01In brief

The short answer.

AI and Financial Model Risk sector scenarios are published, aggregated descriptions of how exposures in the artificial intelligence field could evolve under stated assumptions, read against frameworks such as Supervisory Guidance on Model Risk Management (SR 11-7). They describe sector-level exposures with their limits; they are not forecasts, assess no individual firm and are not investment advice.

02Canvas

Scoping to review.

Canvas · scoping to reviewDesign, not a record
Published scenarios: risk as hazard, exposure and vulnerabilityRisk arises from the interaction of hazard, exposure and vulnerability (sensitivity and adaptive capacity); responses act on each driver and leave a residual risk that is monitored. Design of the process, not a record of a run.

Fig.A programme from scoping to the owner's decision. Design, not a record.

03Spatial finance

From a satellite tile to an exposure update.

How satellite radar turns a flood into an exposure update. Synthetic scene; no real event or place.

How satellite radar maps a flood and updates the count of affected buildings.Synthetic scene and schematic model; no real event or place.
04Status

Releases appear as they are reviewed.

Analysis runs in Nexus Foundry; reviewed releases are listed here.

05Scenario design

Model failure scenarios.

ScenarioMechanism
Regime shiftRelationships learned in calm periods break in stress
Data feed failureA shared input degrades many models at once
Feedback loopModel decisions change the data the model later learns from
Exposure update errorAn automated satellite-derived exposure layer misclassifies damage after an event
06Spatial finance

From a satellite tile to an exposure update.

The figure shows how satellite radar turns a flood into an exposure update, using a synthetic scene. Each step, from radar backscatter to flood mask to building damage, carries an error rate that must be validated before it feeds claims or credit decisions. Methods at GCRI disaster monitoring.

07Key terms

Terms used on this page.

Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.

TermDefinition
ScenarioA plausible description of how the future may unfold under stated assumptions, not a prediction.
Severe but plausible scenarioA disruption scenario extreme enough to test resilience yet realistic enough to occur.
Reverse stress testStarting from a failure outcome and identifying the scenarios that would cause it.
Investment adviceA personal recommendation on investments, a regulated activity in most jurisdictions.
08Sources

Where this page's references lead.

The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.

09Questions

Questions and answers.

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AI and Financial Model Risk

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