All material aspects of rating and estimation must be approved by the management body or a designated committee and by senior management, who must understand the rating systems and their reports; senior management must report material changes and exceptions, ensure the systems work properly and receive regular reports on performance and deficiencies, with IRB analysis forming an essential part of management reporting (risk profile by grade, migration, parameter estimates, realised versus expected outcomes and stress tests). A credit risk control unit independent of origination and reporting directly to senior management must design or select, implement, oversee, test and monitor the rating systems and models, and document changes. Internal audit or a comparable independent unit must review the rating systems and their operation, including PD, LGD, EL and conversion factor estimation, at least annually.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.