Decision on the Use of Unsolicited Credit Assessments

Status: Adopted and published in the Official Journal

This Decision confirms the use of unsolicited credit assessments assigned by certain External Credit Assessment Institutions' (ECAIs) for calculating institutions' capital requirements. The conclusions drawn by the EBA are based on a quantitative and qualitative analysis on both solicited and unsolicited ratings of ECAIs. This analysis has not identified any evidence of differences in the quality of solicited and unsolicited credit ratings for a given ECAI, or that an ECAI has used an unsolicited credit assessments to put pressure on the rated entity to place an order for a credit assessment or other services. The Decision is part of the Single Rulebook in banking and will ensure regulatory harmonisation across the European Union (EU) regarding the use of unsolicited credit ratings for determining institutions' own funds requirements.

  • Press Release
EBA amends Decision on the quality of unsolicited credit assessments of certain ECAIs for the assignment of risk weights

EBA amends Decision on the quality of unsolicited credit assessments of certain ECAIs for the assignment of risk weights

18 July 2017

The European Banking Authority (EBA) published today a revised Decision confirming the quality of unsolicited credit assessments assigned by certain External Credit Assessment Institutions (ECAIs) for calculating institutions' capital requirements. The revised Decision, which reflects the recognition of five additional ECAIs and the de-registering of one ECAI, is part of the Single Rulebook in banking and will ensure regulatory harmonisation across the European Union (EU) regarding the use of unsolicited credit ratings for determining institutions' own funds requirements.
 
Institutions may use unsolicited credit assessments of an ECAI for determining their capital requirements only if the EBA has confirmed that those unsolicited ratings do not differ in quality from solicited ratings of that same ECAI. On 17 May 2016, the EBA issued a Decision allowing the use of unsolicited credit assessments for 22 ECAIs in the context of the Capital Requirements Regulation (CRR). The revised Decision amends this list in light of the recognition of five additional ECAIs and the de-registering of one ECAI and confirms that unsolicited credit assessments do not differ in quality from solicited ratings. In addition, the revised Decision also considers an ECAI that issued only solicited ratings when the EBA Decision was published and started issuing unsolicited ratings subsequently. The revised Decision is based on a quantitative and qualitative analysis also published today. 

Legal basis

The EBA Decision has been developed on the basis of Article 138 of Regulation (EU) No 575/2013 (Capital Requirements Regulation — CRR), which establishes that institutions may use unsolicited credit assessments of an ECAI for the determination of capital requirements only if the EBA has confirmed that those unsolicited ratings do not differ in quality from solicited ratings of that ECAI. In particular, the EBA shall refuse or revoke the confirmation if the ECAI has used an unsolicited credit assessment to put pressure on the rated entity to place an order for a credit assessment or other services.
 

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA confirms the use of unsolicited credit ratings for determining institutions capital requirements

EBA confirms the use of unsolicited credit ratings for determining institutions capital requirements

17 May 2016

The European Banking Authority (EBA) published today a Decision confirming the use of unsolicited credit assessments assigned by certain External Credit Assessment Institutions (ECAIs) for calculating institutions' capital requirements. The Decision is part of the Single Rulebook in banking and will ensure regulatory harmonisation across the European Union (EU) regarding the use of unsolicited credit ratings for determining institutions' own funds requirements.
 
Institutions may use unsolicited credit assessments of an ECAI for determining their capital requirements only if the EBA has confirmed that those unsolicited ratings do not differ in quality from solicited ratings of that same ECAI. Against this background, the Decision published today allows the use of unsolicited credit assessments for a number of ECAIs in the context of the Capital Requirements Regulation (CRR). In particular, going forward, the use of unsolicited ratings assigned by 22 ECAIs will be allowed, which will also support the intention of EU legislators to open the market to all registered and certified credit rating agencies. 
 
The conclusions drawn by the EBA are based on a quantitative and qualitative analysis on both solicited and unsolicited credit assessments of ECAIs. The analysis, also published today, has not identified any evidence of differences in the quality of solicited and unsolicited credit ratings for a given ECAI. In addition, the analysis has not revealed any use of unsolicited ratings by ECAIs to put pressure on rated entities to place an order for a credit assessment or other services - which are the conditions set out in the CRR for allowing the use of unsolicited ratings. 

Legal basis

The Decision has been developed on the basis of Article 138 of Regulation (EU) No 575/2013 (Capital Requirements Regulation — CRR), which establishes that institutions may use unsolicited credit assessments of an ECAI for the determination of capital requirements only if the EBA has confirmed that those unsolicited ratings do not differ in quality from solicited ratings of that ECAI. In particular, the EBA shall refuse or revoke the confirmation if the ECAI has used an unsolicited credit assessment to put pressure on the rated entity to place an order for a credit assessment or other services.

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772