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In order to ensure the Point-In-Time character of these ratios, historical data needs need to be newly updated on a regular basis, for instance once or twice each year. Subsequently, each individual PD or LGD model that is used in the ECL calculation of a master scenario, needs to be recalculated (“calibrated”) in order to obtain newly adapted historical PD and LGD ratios per segment, which can reliably be projected into the future.
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