The European Banking Authority (EBA) has published a Consultation Paper on draft implementing technical standards (ITS) on joint decisions on prudential requirements in accordance with Article 20 of the Capital Requirements Regulation (CRR).
Article 20(8) of the CRR mandates the EBA to draft ITS to specify the joint decision process to be followed by national competent authorities when assessing applications for the permissions referred to in Articles 143(1), 151(4), 151(9), 283, 312(2) and 363 of the CRR. These applications refer to the permissions to use the internal ratings based approach for credit risk, the internal model method for counterparty risk, the advanced measurement approach for operational risk and the internal model for market risk. The main aspects covered by the draft ITS include:
- the possible involvement of third-country supervisory authorities;
- the assessment of the completeness of applications;
- the planning of the joint decision process, and national competent authorities’ contributions to the draft joint decision;
- the elements of the joint decision document;
- the process to be followed when a joint decision is not reached; and
- involvement of the authorities when permission is requested to apply material extensions or changes to internal models that are already approved.
The deadline for comments on the Consultation Paper is 3 October 2014. The EBA will consider responses, and any opinion of the Banking Stakeholder Group, before finalising the draft ITS. It plans to submit the final draft ITS to the European Commission by the end of 2014.
