96. In order to use direct PD estimates for the calculation of own funds requirements in accordance …

In order to use direct PD estimates for the calculation of own funds requirements in accordance with Article 169(3) of Regulation (EU) No 575/2013, institutions should demonstrate that the theoretical assumptions of the probability model underlying the estimation methodology are met to a sufficient extent in practice and that the long-run average default rate is retained. In particular, all data and representativeness requirements should be met, including those in Article 174(c) of Regulation (EU) No 575/2013, and the definition of default should be applied in accordance with Article 178 of Regulation (EU) No 575/2013. Under no circumstances should the use of continuous PDs or any smoothening of default rates be adopted in order to overcome the lack of data, low discriminatory capacity or any other deficiencies in the rating assignment or PD estimation process, or to reduce the own funds requirements.

1. Forbhreathnú

1.1 Tagairtí

• Airteagal 169 3.
• Airteagal 178 Mainneachtain oibleagáideora nó saoráide creidmheasa

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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