4.3 Human judgement in estimation of risk parameters

In order for institutions to complement their statistical models with human judgement, as referred to in Articles 174(b), 174(e), 175(4), 179(1)(a) and 180(1)(d) of Regulation (EU) No 575/2013, they should do all of the following:

• (a) assess the modelling assumptions and whether the selected risk drivers contribute to the risk assessment in line with their economic meaning;
• (b) analyse the impact of the human judgement on the performance of the model and ensure that any form of human judgement is properly justified;
• (c) document the application of human judgement in the model, including at least the criteria for the assessment, rationale, assumptions, experts involved and description of the process.