1.6 Scope of Models
| 1.6.1 | The MMG focuses on the main credit risk models entering the computation of the Expected Credit Loss in the context of the current accounting requirements, due to their materiality and their relevance across the vast majority of institutions. The MMG also provides guidance on other models used for the assessment of interest rate risk in the banking book and net present values. | |
| 1.6.2 | The MMG does not impose the use of these models. The MMG outlines minimum expected practices if institutions decide to use such models, in order to manage Model Risk appropriately. | |
| 1.6.3 | As model management matures across UAE institutions, additional model types may be included in the scope of the MMG in subsequent publications. | |
Table 1: List of model types covered in the MMG | ||
| Model type covered in the MMG |
| Rating Models |
| PD Models |
| LGD Models |
| Macro Models |
| Interest Rate Risk In the Banking Book Models |
| Net Present Value Models |