43. In order to quantify MoC institutions should do all of the following: (a) quantify MoC for the …

In order to quantify MoC institutions should do all of the following:

(a) quantify MoC for the identified deficiencies referred to in paragraphs 36 and 37, to the extent not covered by the general estimation error, at least for each of the categories A and B at the level of the calibration segment ensuring that:
(i) where appropriate adjustments in the sense of paragraph 38 are used, the MoC accounts for any increase in the uncertainty or additional estimation error associated with these adjustments;
(ii) the MoC at category level related to the appropriate adjustments is proportionate to the uncertainty around these adjustments;
(iii) the MoC is applied to address the uncertainty of the risk parameter estimate stemming from any deficiencies among those referred to in paragraphs 36 and 37 that have not been corrected via appropriate adjustments as referred to in point (i);
(b) quantify the general estimation error of category C referred to in paragraph 42 associated with the underlying estimation method at least for every calibration segment; the MoC for the general estimation error should reflect the dispersion of the distribution of the statistical estimator.

1. Overview

Summary	Regulation

Requirements
Source	Requirement

Standards
Source	Requirement

EBA -
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