On 14 December 2020, the European Banking Authority (EBA) published a formal opinion on the European Commission’s amendments of the final draft regulatory technical standards (RTS) on the specification of the assessment methodology for competent authorities regarding compliance of an institution with the requirements to use the internal ratings based (IRB) approach in accordance with Articles 144(2), 173(3) and 180(3)(b) of the Capital Requirements Regulation.

On 21 July 2016, the EBA submitted the final draft RTS specifying the assessment methodology Member State competent authorities should follow in assessing the compliance of an institution with the requirements for the use of the IRB approach. On 29 July 2020, the Commission sent a letter to the EBA informing them of its intention to endorse the RTS with amendments and submitted a modified version of the RTS.

The notification from the Commission opened a period of six weeks during which the EBA may amend its draft RTS on the basis of the Commission’s proposed amendments and resubmit it to the Commission in the form of a formal opinion.

In its formal opinion the EBA rejects those Commission amendments that are set out under the heading “Specific comments” and provides technical reasoning behind such rejection.