Submission #15

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British Bankers Association

Question 1: What views do you have on the nature and appropriateness of the proportionality principle in Article 1(2)? Refer to the attached letter from the BBA

Question 2: Do you agree with the required independence of the validation function in Article 4(3) and Article 10? How would these requirements influence your validation function and your governance in general? Refer to the attached letter from the BBA

Question 3: Are the provisions introduced in Article 49(3) on the calculation of the long-run average of one-year default rates sufficiently clear? Are there aspects which need to be elaborated further? Refer to the attached letter from the BBA

Question 4: Do you agree with the required number of default weighted average LGD calculation method introduced in Article 51(1)(b) and supportive arguments? How will this requirement influence your current LGD calculation method? More generally, what are your views as to balance of arguments for identifying the most appropriate method? Refer to the attached letter from the BBA

Question 5: Are the provisions introduced in Article 52 on the treatment of multiple defaults sufficiently clear? Are there aspects which need to be elaborated further? Refer to the attached letter from the BBA

Question 6: Are the provisions introduced in Article 60 on the treatment of eligible guarantors for the purpose of own-LGD estimates sufficiently clear? Are there aspects which need to be elaborated further? Refer to the attached letter from the BBA

Question 7: Do you support the view that costs for institutions arising from the implementation of these draft RTS are expected to be negligible or small? If not, could you please indicate the main sources of costs? Refer to the attached letter from the BBA

Question 8: What are the main benefits for institutions that you expect by the adoption of these draft RTS? Refer to the attached letter from the BBA

Question 9: Do you expect that these draft RTS will trigger material changes to the rating systems (subject of the RTS on materiality of model changes)? If yes, could you please indicate the main sources of the changes (please list the relevant Articles of these draft RTS)? Refer to the attached letter from the BBA

Upload files BBA01-#444986-v1-EBA_RTS_IRB_approaches_BBA_response.docx

Name of organisation British Bankers Association