68. Where institutions use different rating systems characterised by different rating philosophies …

Where institutions use different rating systems characterised by different rating philosophies, they should use the information on the rating assignments or risk parameters estimates with caution, especially when making use of rating information or default experience obtained from external rating agencies. Where institutions use different rating systems with different characteristics, such as different philosophies or different levels of objectivity, accuracy, stability, or conservatism, they should ensure that the rating systems have an appropriate level of consistency and that any differences between them are well understood. Such understanding should at least enable the institution to define an appropriate way to combine or aggregate the information produced by the various rating systems when this is necessary according to the institution’s policies. Institutions should have full understanding of the assumptions and potential inaccuracies arising from such a combination or aggregation.

5.2.5 Homogeneity of obligor grades or pools

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/