Second, the input floors, ie the restrictions on model parameters, which are estimated using loss data, should not be set as high as in the current proposals. Third, the same logic applies to the F-IRB2, a less comprehensive internal model in which certain loss ratios are already stipulated by regulation.
The Bundesbank therefore proposes that the capital requirements should be lowered when both the institutions and the supervisors can provide reliable past data on low losses and stable markets. This method is 2/4  BIS central bankers' speeches  known among experts as the hard test. Fourth, the hard test should be kept in the standard approach for calculating credit risks. 3.