195. For the purpose of Article 171(2) of Regulation (EU) No 575/2013 institutions should apply additional conservatism to the outcomes of the rating assignment where any deficiencies are identified related to the implementation of the model in the IT system or to the process of assignment of risk parameters to obligors or facilities in the current portfolio (application of risk parameters), especially when those deficiencies relate to data used in the rating assignment process. They should do so by establishing a framework that consists of the following phases:

(a) identification of deficiencies of implementation of the model in the IT system or application of risk parameters;

(b) specification of the form of conservatism to be applied and quantification of the appropriate level of conservatism;

(c) monitoring of the deficiencies and correcting them;

(d) documentation.