[Social needs of statistical financial models]
In contemporary society, financial risk is important problem as risk of actual economy. The financial risk is categorized by market risk which has roots in financial markets volatility, credit risk which means debt default and operational risk of artificial mistake. It is urgent and crucial concern for investors, banks and financial government agency to estimate and control the risks.
For example, the New Basel Accord in 2006 imposes to international banks that they must estimate a volume of the risks using statistical models and develop a system to control the risks. Security companies and insurance companies are strongly requested to calculate the risks by government agency. Therefore, statistical financial models and control system are eagerly anticipated. Database of risk data, statistical models, control system and the validation method for the financial statistical models are immediately explored.

[Model building and validation method]
When we estimate a volume of the risks and control the risks, we must make a statistical model using a huge database of financial market and validate the model to adjust for research purposes. There are many kinds of models based on variety of databases and purposes.
Our institute researches the financial model buildings and control systems for the market risk and the credit risk. For details of the scheme, we focus on the term structure of bond market, the latent factor of stock market, market microstructures, correlation of credit risk and the loss given default. Additionally, the validation method of the models is analyzed.

[Contribution to society]
Our contribution of the researches is announced not only to academic society but also to business circles, private think tanks, auditing boards and the financial government agency. In consequence, we contribute fund management, risk control, efficiency of financial transaction and the financial regulatory administration

Members
S.Yamashita