5.3.7 Lookup Table Driver

Lookup Table Driver rules are used in conjunction with Allocation rules (of the Lookup Driver Table type) to match Instrument level data with data from user-defined lookup tables. Each Instrument table row retrieved within the Allocation rule's Source definition is matched with your lookup table to return a lookup table factor. For each row, the resulting lookup table factor is arithmetically combined (typically multiplied) with the column specified in the Allocation rule's Source definition to update another column within the same row. A very typical use case might be the allocation of Loan Loss Reserves, Economic Loan Loss Provision, or Credit Risk Capital to each of your commercial loan instruments as a function of Product, Remaining Term to Maturity, and Credit Rating. Static Driver Table rules also support this kind of “matching”, but only for key processing dimensions (only for Product in this example). Lookup Table Driver rules extend the functionality of Static Table Driver rules by allowing you to match on Instrument level measures or attributes (Remaining Term to Maturity and Credit Rating in this example).

Additional examples of how you might use a Lookup Table Driver rule include the following kinds of assignments:

• Risk equity as a function of Product (a dimension), Division (a rollup point within a dimension), Credit Score (an instrument-level attribute), and Remaining Term to Maturity (also an instrument-level attribute).
• Loan Loss Reserve or Economic Provision (expected loss) as a function of Product (a dimension), Amortization Type (an instrument-level attribute), and Loan to Value Ratio (also an instrument-level attribute).
• Account Maintenance Expense as a function of Product (a dimension) and Current Net Book Balance (an instrument-level measure).