Validation reporting on internal models

Perspectives

Validation reporting on internal models

European Central Bank (ECB) announced on the 5th of March 2019 the launch of the annual validation reporting on internal models used for calculating own funds requirements for credit risk.

To ensure a level playing field, the ECB requires significant institutions to report specific data on the validation of internal models used for calculating own funds requirements for credit risk and operational risk. This data collection does not replace institutions’ own internal validation processes, but establishes a common minimum set of metrics to be reported to the ECB on an annual basis together with institutions’ internal validation reports.

This article provides further insight on what supplementary validation reporting consists in and how it impacts institutions.

Did you find this useful?