86. In the exceptional case where the long-run average default rate is below the average of all …

In the exceptional case where the long-run average default rate is below the average of all observed one-year default rates due to any adjustment made in accordance with paragraph 85, institutions should compare their adjusted long-run average default rates with the higher of the following:

• (a) the observed average of the one-year default rates of the most recent 5 years;
• (b) the observed average of all available one-year default rates. Institutions should justify the direction and magnitude of the adjustment, including the adequacy of the considered MoC, in line with the requirement in Article 49(4)(b) of the RTS on IRB assessment methodology and section 4.4. In addition, where the adjusted long-run average default rate is lower than the higher of the two values referred to in points (a) and (b), they should specifically justify why these two values are not appropriate.

5.3.5 Calibration to the long-run average default rate

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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