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
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.

Submission date
Final publishing date
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.

Disclaimer

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