I'm building some models, for example, Bad Loan (NPL) rate.
It's based on historical simulation method -- basically it's saying the future behavior could be predicted by history data.
However, this is not always true, when the market changes. For example, when 2008 financial crisis came, NPL rates went up; when there's a tax cut, the NPL drops.
So, whenever market changes, the model will fail, but after a few months, it will pick up the trend and work again.
Now, how could I defend my model? How to justify that the failure is acceptable? Is there some industry standard / criterion about the tolerance of model mismatch caused by external factors (e.g. market, economics)?