Response to consultation paper on draft regulatory technical standards on the permanent and temporary uses of the IRB approach

Go back

Q2: Do you agree with the proposed draft RTS regarding permanent partial use of the Standardised Approach (SA) for the exposures specified in Article 150(1)(a) and (b) of the CRR?

YES

Q3: Do you agree with the proposed draft RTS regarding permanent partial use of the SA for the exposures specified in Article 150(1)(c) of the CRR? Which of the two alternative proposals presented in the impact assessment section under ‘Technical options considered’ do you prefer?

YES. Both alternative proposals appears to be quite complex to implement.

Q4: Do you agree with the quantitative thresholds proposed in Articles 2(1), 3 and 4(2) of these draft RTS? If not, what thresholds do you consider more suitable?

YES

Q5: Do you think that separate quantitative thresholds should apply for application of these draft RTS on an individual and on a consolidated basis? Which of the two alternative proposals presented in the impact assessment section under ‘Technical options considered’ do you prefer?

We prefer Option 2. The reason is in that the application of the threshold both at the consolidated and at the individual level is unduly burdensome for a large group with many subsidiaries. Moreover, it is somewhat contradictory, especially in case of Article 150 (1) (c), because banking groups often allocate marginal business units or segments to dedicated subsidiaries (e.g. for the purpose of subsequent asset disposal), which would inevitably breach the threshold at the individual level. Finally, it would be awkward if an asset class or a segment under permanent use of SA at the consolidated level, were material at the individual level, thus obliging a subsidiary to develop a model on a stand-alone basis. Option 1 mitigates but do not address fully these drawbacks of the proposed approach.

Q6. Do you agree with our analysis of the impact of the proposals in this Consultation Paper? If not, can you provide any evidence or data that would explain why you disagree or which might assist our analysis of the possible impact of the proposals?

YES

Name of organisation

Intesa Sanpaolo