CA-5.8.3
The overarching principle behind these requirements is that rating and risk estimation systems and processes provide for a meaningful assessment of borrower and transaction characteristics; a meaningful differentiation of risk; and reasonably accurate and consistent quantitative estimates of risk. Furthermore, the systems and processes must be consistent with internal use of these estimates. CBB will periodically develop detailed review procedures to ensure that banks' systems and controls are adequate to serve as the basis for the IRB approach.
Apr 08