Homogeneity
Article 36
1. When assessing the homogeneity of obligors or exposures assigned to the same grade or pool for the purposes of Article 170(1) and (3)(c) of Regulation (EU) No 575/2013, competent authorities shall assess the similarity of the obligors and transaction loss characteristics included in each grade or pool with regard to all of the following factors: (a) internal ratings; (b) estimates of PD; (c) where applicable, own estimates of LGD; (d) where applicable, own estimates of conversion factors; (e) where applicable, own estimates of total losses. For retail exposures competent authorities shall assess those factors for each rating system. For exposures other than retail exposures competent authorities shall assess them only for those rating systems in respect of which a sufficient quantity of data is available. 2. For the purposes of the assessment under paragraph 1, competent authorities shall assess the range of values and the distributions of the obligor and transaction loss characteristics included within each grade or pool.