The European Banking Authority (EBA) has published a consultation paper on draft regulatory technical standards (RTS) to specify the conditions for the permanent and temporary uses of the standardised approach (SA) by institutions that have received permission to use the internal ratings based (IRB) approach. The main proposals within the RTS are:
- definition of the maximum levels of exposure permanently allowed under the SA in the ‘central governments and central banks’ and ‘institutions’ exposure classes, and for immateriality or non-significance reasons;
- definition of qualitative criteria against which the competent authorities shall assess whether it would be unduly burdensome to implement a rating system for the ‘central governments and central banks’ exposure class and for the ‘institutions’ exposure class;
- definition of a minimum initial level of exposures (and risk-weighted exposures) to be treated under the IRB approach by IRB institutions; and
- definition of qualitative criteria against which the competent authorities shall assess applications of institutions for a sequential roll-out of the IRB Approach.
The consultation closes on 26 September 2014.
View Consultation Paper: Draft regulatory technical standards on the sequential implementation of the IRB Approach and permanent partial use under the Standardised Approach under Articles 148(6), 150(3) and 152(5) of Regulation (EU) No 575/2013 (Capital Requirements Regulation), 26 June 2014