Review of estimates
Article 43
When assessing the review of risk parameter estimates by the institution as referred to in Article 179(1)(c) of Regulation (EU) No 575/2013, competent authorities shall verify that: (a) the process and the annual plan for the review of estimates provide for a timely review of all estimates; (b) criteria for the identification of situations which trigger a more frequent review have been identified; (c) the methodologies and data used for the estimation of risk parameters reflect changes in the underwriting process and in the composition of the portfolios; (d) the methodologies and data used for the LGD estimation reflect changes in the recovery process, the types of recoveries and the duration of the recovery process; (e) the methodologies and data used for the conversion factor estimation reflect changes in the monitoring process of undrawn amounts; (f) the data set used for the estimation of risk parameters includes the relevant data from the latest observation period, and are updated at least on an annual basis; (g) the technical advances and other relevant information are reflected in the risk parameters estimates.