The EBA consults on amending its technical standards on the joint decision process for internal model authorisation

The European Banking Authority (EBA) today published a consultation paper amending the Implementing Regulation on the joint decision process for internal model authorisation under the Capital Requirements Regulation (CRR). The revised Implementing Technical Standards (ITS) incorporate changes to the EU legal framework, including the reduced scope of application for internal models under CRR III and the updated framework on the general functioning of supervisory colleges. This draft amending ITS are part of the first phase of the EBA roadmap for implementing the EU Banking Package. This consultation runs until 16 October 2024.

The existing ITS establish the process to help competent authorities work together while performing their assessments and preparing their contributions to the joint decision on institutions’ application to use internal models for prudential purpose, including: a) possible involvement of third-country supervisory authorities, b) specification on the procedure for assessing the completeness of application, c) planning of the joint decision process and, more generally, the cooperation between home-host authorities.

The novelty of the draft amending ITS is mainly related to the overall revised scope for internal model set out in the CRR III, where the possibility to apply these approaches is no longer in place for operational risk. Therefore, the references to the Advanced Measurement Approach (AMA) have been removed from the scope of the revised ITS. Additionally, the draft amending ITS reflect the updated references to the ITS and Regulatory Technical Standards (RTS) on the functioning of supervisory colleges.

Consultation process

Responses to the consultations can be sent to the EBA by clicking on the "send your comments" button on the consultation page.

All contributions will be published after the consultation closes, unless requested otherwise. The deadline for the submission of comments is 16 October 2024.

A public hearing on this consultation will take place on 18 September 2024 from 14:00 to 15:00 CET. Deadline for registration is 13 September at 18:00 CET.

Legal basis and background

This draft ITS have been developed in accordance with Article 20(8) of the Regulation (EU) 575/2013 (CRR), as amended by the Regulation (EU) 2024/1623 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III).