2016_2559 Classification of exposures for which an IRB bank uses the standardised approach, into IRB exposure classes (Article 147 CRR)

Question ID:

2016_2559

Legal Act:

Regulation (EU) No 575/2013 (CRR)

Topic:

Credit risk

Article:

147

COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:

Not applicable

Article/Paragraph:

none

Disclose name of institution / entity:

Type of submitter:

Competent authority

Subject Matter:

Classification of exposures for which an IRB bank uses the standardised approach, into IRB exposure classes (Article 147 CRR)

Question:

Is there any regulation stipulating that for exposures where an IRB bank uses the standardised approach, these "standardised" exposures have to be classified into exposure classes valid for the standardised approach (Article 112 Regulation (EU) No 575/2013 (CRR)).

Background on the question:

A bank using temporary/permanent partial use of standardised approach maintains that being an IRB bank it is not obliged to classify/report its exposures into the exposure classes valid for the standardised approach.

Date of submission:

13/01/2016

Published as Final Q&A:

03/06/2016

Final Answer:

Where an institution permitted to use the IRB approach has, based on received prior permission of the competent authorities, exercised the discretion in Article 150 of Regulation (EU) No 575/2013 (CRR) to apply the Standardised Approach for certain exposures, this institution has to comply with Chapter 2 of Part 3, Title II CRR, and in particular its Article 112 CRR, which requires to assign these exposures into given exposures classes.

The same would apply for the exposures to which an institution does not yet apply the IRB approach if it has, based on prior permission of the competent authorities, exercised the discretion in Article 148 CRR to sequentially carry out the implementation of the IRB approach.

Status:

Final Q&A

Answer prepared by:

Answer prepared by the EBA.

Note to Q&A:

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.