5.2.1 Data requirements specific for model development

56. For the purpose of model development, institutions should ensure that the RDS contains the values of the risk drivers for appropriate points in time. These points in time may vary between different risk drivers. In the selection of appropriate points in time institutions should take into account the dynamics as well as the update frequency of the risk drivers throughout the whole period in which an obligor was in the portfolio and, in the case of a default, throughout the year prior to default.

5.2.2 Risk drivers and rating criteria

57. In the process of selecting risk drivers and rating criteria, institutions should consider a broad set of information relevant to the type of exposures covered by the rating system. Potential risk drivers analysed by institutions should include in particular the following:

(a) obligor characteristics, including sector and geographic location for corporates;

(b) financial information, including financial statements or income statements;

(c) trend information, including growing or shrinking sales or profit margin;