Article 53
Length of the historical observation period
When assessing the length of the period used for the estimation of conversion factors referred to in paragraph 2 and paragraph 3 of Article 182 of Regulation (EU) No 575/2013 and Delegated Regulation (EU) 2017/72 (‘historical observation period’), competent authorities shall verify that:
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(a) |
the length of the historical observation period covers at least the minimum length required by paragraph 2 and paragraph 3 of Article 182 of Regulation (EU) No 575/2013 and, where applicable, Delegated Regulation (EU) 2017/72; |
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(b) |
where the available observation period is longer than the minimum period required by paragraph 2 and paragraph 3 of Article 182 of Regulation (EU) No 575/2013 for a data source, and the data obtained from it are relevant for the estimation of conversion factors, that the information for that longer period is used; |
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(c) |
for retail exposures, where the institution does not give equal importance to all historical data used, that this is justified by better prediction of drawings on commitments and that, if a zero weight or a very small weight is applied to a specific period, this is either duly justified or leads to more conservative estimates. |