Internal approaches used for the calculation of own funds requirements for market and credit risk are subject to an annual assessment by competent authorities. The EBA assists competent authorities in their assessment by providing a report, which includes benchmarks that help identify any material differences in RWA outcomes. The legal basis for the benchmarking exercises is laid down in the Capital Requirements Directive (CRD), in particular Article 78, as well as in the following technical standards provided by the EBA: a) Regulatory Technical Standards (RTS) on the assessment of the internal approaches adopted by institutions and the procedures for sharing those assessments between competent authorities; b) Implementing Technical Standards (ITS) specifying the benchmarking portfolios and reporting instructions for institutions to be applied in the annual benchmarking exercises.
