External Credit Assessment Institutions (ECAI)

ECAIs play a significant role in the standardised approach and securitisation framework of prudential regulation through the mapping of each of their credit assessments to the corresponding risk weights. The EBA, together with ESMA and EIOPA, has been assigned the task of providing an objective mapping across all ECAIs in order to promote a consistent implementation of CRR across the EU. Importantly, the EBA will also contribute to the implementation of CRR2/CRDV and CRA 3 Regulation in assessing overreliance on ratings both by regulators and market participants through the publication of guidelines and reports in cooperation with ESMA and EIOPA, in line with the policy agreed by the Financial Stability Board.

Technical Standards, Guidelines & Recommendations

Technical standards

Status

Type of institution

Legal act

Date

Adopted and published in the Official Journal of the EU

Implementing Technical Standards on the mapping of ECAIs credit assessments under the Standardised Approach of the CRR

The Joint Committee of the three European Supervisory Authorities (EBA, ESMA and EIOPA – ESAs) published its draft Implementing Technical Standards (ITS) on the mapping of the credit assessments to risk weights of External Credit Assessment Institution (ECAIs). These ITS will be part of the Single Rulebook in banking aimed at enhancing regulatory harmonisation across the European Union (EU).

Final draft RTS/ITS adopted by the EBA and submitted to the European Commission

Implementing Technical Standards on the credit quality steps for ECAIs credit assessments under Solvency II

These draft Implementing Technical Standards (ITS) are on the allocation of External Credit Assessment Institution (ECAIs) to an objective scale of credit quality steps under Solvency II.

Adopted and published in the Official Journal of the EU

Implementing Technical Standards on the mapping of ECAIs Credit Assessments for securitisation positions

These Implementing Technical Standards (ITS) specify the correspondence or ‘mapping’ between credit ratings and credit quality steps that shall determine the allocation of appropriate risk weights to credit ratings issued by ECAIs on securitisations where the Standardised Approach (SA) or the Internal Ratings Based (IRB) approach for securitisations are used.

Guidelines

Status

Type of institution

Legal act

Date

Guidelines on the recognition of External Credit Assessment Institutions

CEBS reviewed its Guidelines on the recognition of ECAIs to clarify that for Credit Rating Agencies (CRAs), which are registered under the Regulation on CRAs, the only criteria that should be assessed in the ECAIs’ initial recognition process and on-going review are the technical criteria on ‘Credibility and Market Acceptance’ and ‘Transparency and Disclosure’ with respect to their individual credit assessments.