Response to consultation on Guidelines PD estimation, LGD estimation and treatment of defaulted assets

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Question 2: Do you see any operational limitations with respect to the monitoring requirement proposed in paragraph 53?

GFC Good Finance Company AS and Law Office Tark having been analysed this issue, find that the requirement to calculate default rates quarterly seems to be too strict. At least, it should depend on risk appetite and business volume of the financial institution (split on ranges)?

Question 6: Do you have processes in place to monitor the rating philosophy over time? If yes, please describe them.

GFC Good Finance Company AS and Law Office Tark having been analysed this issue, find that that is acceptable. Sort-term contracts - the term for fulfillment of the obligations shall be no longer than twelve months.

Question 9: Do you agree with the proposed principles for the assessment of the representativeness of data?

GFC Good Finance Company AS and Law Office Tark having been analysed the issue in this point, find this provision appropriate. Especially the proposed categories A-D-C-D" for identifying erros/uncertainties are workable."

Name of organisation

Law Office Tark (Estonia)