Soundness of the reporting process and the process for addressing the validation conclusions, findings and recommendations
Article 13
When assessing the soundness of the reporting process and the process to address the validation conclusions, findings and recommendations, for the purposes of the requirements laid down Article 144(1)(f), Article 174(d), Article 185 and Article 188 of Regulation (EU) No 575/2013, competent authorities shall verify that: (a) the validation reports identify and describe the validation methods used, the tests performed, the reference data set used and the respective data cleansing processes and include the results of those tests, the conclusions of the validation, the findings and the respective recommendations; (b) the conclusions, findings and recommendations of the validation reports are directly communicated to senior management and to the management body of the institution or to the committee designated by it; (c) the conclusions, findings and recommendations of the validation reports are reflected in changes and improvements in the design of internal ratings and risk estimates, including in the situations described in the first sentence of Article 185(e) and Article 188(e) of Regulation (EU) No 575/2013; (d) the decision-making process of the institution takes place at the appropriate management level.