Decision Record

A decision record is the timestamped artifact documenting an underwriting decision, price, structure, capital committed, and portfolio context, captured at the moment capital is committed and referencing the specific prediction record it relied on. Kept separate from the prediction record, it is what lets a later review distinguish a bad model from a bad price.

A decision record is the second of the two audit trails every underwritten legal-asset position should generate. Where a prediction record states what a model concluded about a matter's probable outcome and duration, a decision record states what the institution actually did with that conclusion: the price, the structure, the capital committed, the cost of that capital, and the portfolio context the position was evaluated against, all captured at the moment of commitment. A properly built decision record references the specific prediction record it relied on, by version and timestamp, so a later reviewer can confirm exactly which distribution the desk was pricing against rather than reconstructing the sequence from memory or from a narrative document written after a result was already known. Keeping the decision record as an artifact distinct from the prediction record, rather than merging the two into a single retrospective memo, is what allows a governance review to distinguish two very different failure modes after a loss: a prediction that was genuinely wrong, or a prediction that was right but priced badly by the desk anyway. An institution asked to produce a decision record for a specific, named position should be able to do so as an independently verifiable artifact, not as a description of the process that supposedly generates one.