The IRB Use Test: Background and Implementation.
This paper is intended to provide background on the evolution of the Basel Committee's thinking on the use test for IRB and clarify expectations for the use of IRB components and risk estimates for internal purposes. It presents a number of principles that are intended to support banks and supervisors in interpreting the key use test provisions of the Basel II Framework. As these principles focus on interpretation rather than expansion of the use test requirements, they are expected to be consistent with guidance on the use test that many jurisdictions have already formalised.
- Publication Date: September 2006
- Publication Type: Guidelines
- Publication Status: Current
- Publication Category: Basel II
- Number of Pages: 5
- Keywords: Credit Risk
For definitive information on regulatory matters always consult primary sources, especially where it concerns legally binding rules and regulations.
The above regulatory document abstract is quoted verbatim in this Open Risk Manual entry and provided free of charge for the convenience of all internet users. There is no explicit or implicit endorsement of this web service by the Bank of International Settlements. The copyright of the included material rests with the original authors (Links to the original texts are duly provided).