(a)

provide an outline of the assumptions and theory underlying the metrics chosen by the institution for the purpose of the assessment of the model’s performance;

(b)

specify the application of the metrics, indicate whether the use of each metric is compulsory or discretionary and when it is to be used and ensure that the metrics are used coherently;

(c)

specify the conditions of the applicability and acceptable thresholds and accepted deviations for the metrics and set out whether and, if so, how statistical errors relating to the values of those metrics are taken into account in the assessment process, and, where more than one metric is calculated, establishes the methods of aggregating several test results to one single assessment;

(d)

determine a process for ensuring that events of model performance deterioration leading to the breach of the thresholds referred to in point (c) are communicated to the appropriate members of the senior management in charge of it and that clear guidance on how the outcomes of the metrics are considered is provided by the members of the management responsible for taking final decision as regards implementation of the necessary changes to the model.