205. Competent authorities should form a view on the prudent valuation framework of the investment …

Competent authorities should form a view on the prudent valuation framework of the investment firm, as a flawed valuation process may lead to errors in the calculation of the exit value of financial instruments leading to an underestimation of potential losses of the investment firm. While performing this analysis, competent authorities should pay particular attention to the calculation of reserves (notably fair value reserves, model reserves) and their potential impact on the capital position of the investment firm.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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