(99)

Article 174 is amended as follows: the introductory wording is replaced by the following: ‘Institutions shall use statistical or other mathematical methods (“models”) to assign exposures to obligor or facility grades or pools. The following requirements shall be met:’ ; point (a) is replaced by the following: ; the model shall have good predictive power and own funds requirements shall not be distorted as a result of its use;’ the following paragraph is added: ‘For the purposes of the first paragraph, point (a), the input variables shall form a reasonable and effective basis for the resulting predictions. The model shall not have material biases. There shall be a functional link between the inputs and the outputs of the model, which may be determined through expert judgement, where appropriate.’ ;

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.