Market-linked credit risk drivers often face specific disadvantages:

Need to supply a large number of input parameters to the model:Complex models require numerous data inputs, which can be challenging to obtain and maintain.

Slow computation speed due to higher simulation complexity:The complexity of these models can lead to slower computation times, making them less efficient for real-time analysis.

Non-linear nature of models and the need to estimate unknown variables are also relevant but are not as primary disadvantages as the first two mentioned.

References

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