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    EC Amends Rule on Mapping of External Credit Assessment Institutions

    December 04, 2019

    EC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation (CRR or EU Regulation No 575/2013). The Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

    Regulation 2016/1799 specifies, in its Annex III, the correspondence of the relevant credit assessments issued by an ECAI to the credit quality steps set out in CRR (mapping). Following the latest amendments, by the Implementing Regulation (EU) 2018/634, to Annex III to Regulation (EU) 2016/1799, the quantitative and qualitative factors underpinning the credit assessments of some mappings in Annex III to Regulation (EU) 2016/1799 have changed. In addition, some ECAIs have extended their credit assessments to new market segments, resulting in new rating scales and new credit rating types. It is, therefore, necessary to update the mappings of the ECAIs concerned.

    Since the adoption of Regulation (EU) 2018/634, another credit rating agency has been registered in accordance with Credit Rating Agencies Regulation (No 1060/2009). The credit assessments applied by the newly registered ECAI are based on the same methodology as that applied by its parent company, a third-country ECAI for which a mapping had already been established in Annex III to Regulation (EU) 2016/1799. It is, therefore, appropriate in this specific case that the mapping for the newly registered ECAI mirrors the mapping established for that third-country ECAI. Therefore, Regulation (EU) 2016/1799 has been amended accordingly. Annex III to Regulation (EU) 2016/1799 has been replaced by the text set out in the Annex to Regulation (EU) 2019/2028.

     

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    Keywords: Europe, EU, Banking, Securities, Insurance, ECAI, Mapping, CRR, CRA Regulation, Credit Risk, Credit Assessment, Credit Quality Steps, EC

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