63. To enhance the robustness of their models, institutions should consider challenging their …

To enhance the robustness of their models, institutions should consider challenging their calibration approach by:

a. comparing their results and assumptions with external, including supervisory, observations from credible sources to assess the consistency of their own assumptions and results;
b. using sensitivity analyses to test the degree of stability and consistency of their models’ outputs or to identify the effect of potential non-linearities not included in the scenarios;
c. where a third-party model is used, verifying that the validation framework of the external suppliers complies with the EBA Guidelines on outsourcing arrangements.

1. Overview

Summary	Regulation

Requirements
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Standards
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EBA -
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