Models

1. Commercial modelling product purchased
2. Existing model reused
3. New model developed
4. Merits of each method will depend on:

   Annotations:

   • The level of accurace required The "in-house" expertise available The number of times the model is to be used The desired flexibility of the model The cost of each option

Annotations:

• Model used must be valid, rigorous enough for its purpose and adequately documented. The model chosen should be capable of reflecting risk profile of financial products, schemes, contracts or transactions being modelled adequately. The parameters used should be capable of reflecting the risk profile of the financial products, schemes, contracts or transactions being modelled adequately. The inputs to the parameter values should be appropriate to the business being modelled and take into account any special features of the provider and the economic and business environment in which it is operating. The workings of the model should be easy to appreciate and communicate. The results should be displayued clearly, The model should exhibit sensible joint