PRA Updated IRB Approach CRR Permission Application Pack
The PRA published an updated internal ratings based (IRB) approach Capital Requirements Regulation (CRR) Permission application pack. This application pack should be used by institutions applying under Article 143 of CRR for permission to use the IRB approach to calculate risk-weighted exposure amounts for credit risk.
The application process is modular and eight separate forms need to be completed for each module of the application process. The IRB application process has been split into three phases made up of eight modules. These modules are Scoping (Module 1), Technical model reviews (Module 2), IT and Data (Module 3), Use test and experience test (Module 4), Permanent partial use and roll out plans (Module 5), Financial reporting and stress testing (Module 6), Internal audit and independent validation (Module 7), and Governance (Module 8). Each module covers a different aspect of a firm’s plans for IRB implementation and applicants are required to provide a response to all of the questions in each module. Each module submitted to the PRA must be signed off by the firm's CEO or other appropriate senior manager, as agreed with the supervisory team.
Applicants will initially need to submit a completed application form for Module 1, with responses to requests for information contained in the module (the PRA may request further information, including additional documentation, at a later stage). Review process of the PRA is designed to establish compliance with the CRR, assess prudential risk, and ensure a consistent treatment for all firms. The PRA has the power to exercise various national discretions given to the competent authority under the applicable articles of the CRR and these are referred to as “CRR Permissions.”
Related Links
CRR Permissions Application Pack (PDF)
Application of CRR Permissions
Keywords: Europe, UK, PRA, Banking, CRR, National Discretion, IRB Approach
Previous Article
EBA Single Rulebook Q&A: First Update for August 2017Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
