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Recital 6

Recital 6

(6)Furthermore, the criteria for the modellability of risk factors should cover cases where an institution uses a parametric function to represent a curve, a surface or a cube and sets the function parameters as the risk factors in its risk-measurement model. In those cases, those criteria should specify how the modellability assessment should be performed, taking into consideration the specificities of those parametric functions and of the function parameters.

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