Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of extensions and changes of internal approaches for credit, market and operational risk

Status: Adopted and published in the Official Journal

These Regulatory Technical Standards aim at harmonising the assessment of the materiality of extensions and changes to credit institutions’ internal approaches and to ensure that the approved internal approaches comply with the regulatory requirements. In particular, these RTS specify the conditions for assessing the materiality of extensions and changes to: the Internal Rating Based approach (IRB approach) for credit risk; the Advanced Measurement Approach (AMA) for operational risk and the Internal Models Approach (IMA) for market risk.

Consultation on draft Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of extensions and changes of internal approaches for credit, market and operational risk (EBA/CP/2013/02)

Summary
11/03/2013

The European Banking Authority (EBA) launches today a consultation on draft technical standards (RTS) aimed at specifying the conditions for assessing the materiality of extensions and changes to internal approaches when calculating own funds requirements for credit, market and operational risk. These RTS will be part of the Single rulebook aimed at enhancing regulatory harmonisation in Europe. The consultation runs until 11 June 2013.

Main features of the RTS

All institutions shall apply for permission whenever they intend to implement any material extension and change to their internal approaches.

In this respect, the proposed RTS aim at harmonising the assessment of the materiality of extensions and changes to their internal approaches and to ensure that their approved internal approaches comply with the regulatory requirements. In particular, these RTS specify the conditions for assessing the materiality of extensions and changes to:

  • the Internal Rating Based approach (IRB approach) for credit risk
  • the Advanced Measurement Approach (AMA) for operational risk
  • the Internal Models Approach (IMA) for market risk


The proposed consultation paper is based on the draft Capital Requirements Regulation (CRR) as per the European Commission’s proposals of 20 July 2011 and takes into account all the major changes subsequently introduced by the Council and the EU Parliament during their negotiations.

Following the end of the consultation period, and to the extent that the final CRR text changes before the adoption of the RTS, the EBA will adapt the draft RTS accordingly to reflect any developments.

Consultation process

Comments can be sent to the EBA by e-mail to EBA-CP-2013-02@eba.europa.eu by 11 June 2013, indicating the reference EBA/CP/2013/02.


All contributions received will be published following the close of the consultation, unless requested otherwise.

A public hearing will take place at the EBA premises on 13 May 2013 from 14:00 to 16:00 GMT. To register for the public hearing, click here.