Supervisory handbook for the validation of internal ratings based systems
- Status:
The supervisory handbook for the validation of internal ratings based (IRB) systems clarifies the role of the validation function as part of corporate governance, in particular in terms of scope of work and interaction with the credit risk control unit. The handbook provides some general guidance on the expectations relative to the validation function, as already laid out in Article 185 of the Capital Requirements Regulation (CRR).