Second, risk models should not be used in isolation: every model encapsulates a different version of reality therefore using different models helps to build a more representative picture of the risks facing an institution. 3. Third, risk models by their nature make simplifying assumptions regarding reality. Therefore limitations of individual models should be clearly signalled.
The spike in spreads during the crisis is obvious. But they have come back from those levels. And even though they are higher than the levels prior to the financial crisis, spreads are still at low levels. Again, funding from these markets is available on favourable terms.