Featured Product

    EBA Report Analyzes Member State Reliance on External Credit Ratings

    May 17, 2021

    EBA published a report that analyzes the extent to which the national law of member states relies on external credit ratings. The analysis identified no mechanistic reliance on external credit ratings. Furthermore, using the EBA supervisory reporting data, the report shows that the use of external credit ratings in the calculation of risk-weighted exposure amounts under the standardized approach and under the External Ratings Based Approach (SEC-ERBA) of the securitization framework is limited. In this report, EBA recommends removal of the mandate laid down in Article 161 (3) of the Capital Requirements Directive (CRD) to publish this bi-annual report.

    The said CRD mandate requires EBA, in cooperation with ESMA and EIOPA, to publish a bi-annual report on the reliance on external credit ratings in national law and how competent authorities meet their obligations under Article 77(1) and (3) and Article 79(b) CRD and the degree of supervisory convergence in that regard. The recommendation is made on the basis of the limited references to external credit ratings found in the national law of member states, along with developments in international regulation, namely the provisions to reduce mechanistic reliance on external credit ratings in the standardized approach of the credit risk framework in the final Basel III reforms and in the new securitization framework introduced in the Capital Requirements Regulation (CRR). In addition, the report stresses that the “enhanced due diligence” introduced in the final Basel III framework should be implemented in the EU framework. To collect the relevant information, in December 2020, EBA had launched a survey among EU banking supervisors, which showed that the national law of member states does not introduce mechanistic references to external credit ratings and that the CRD-related requirements to reduce reliance have been transposed into national legislation.

     

    Related Links

    Keywords: Europe, EU, Banking, External Credit Ratings, CRD, CRR, Credit Risk, Standardized Approach, Securitization Framework, Basel, Regulatory Capital, SEC-ERBA, EBA

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514