On 1 July 2021, the European Banking Authority (EBA) issued a revised Decision confirming the quality of unsolicited credit assessments assigned by certain External Credit Assessment Institutions (ECAIs) for calculating institutions’ capital requirements. The revised Decision, which reflects the recognition of two additional ECAIs and the de-registering of three ECAIs, is part of the Single Rulebook in banking and will ensure regulatory harmonisation across the European Union regarding the use of unsolicited credit ratings for determining institutions’ own funds requirements.

The EBA Decision has been developed on the basis of Article 138 of the Capital Requirements Regulation, which establishes that institutions may use unsolicited credit assessments of an ECAI for the determination of capital requirements only if the EBA has confirmed that those unsolicited ratings do not differ in quality from solicited ratings of that ECAI. In particular, the EBA shall refuse or revoke the confirmation if the ECAI has used an unsolicited credit assessment to put pressure on the rated entity to place an order for a credit assessment or other services.

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