Consultation on amending ITS on the mapping of credit assessments of ECAIs for credit risk

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) launched today a public consultation to amend the Implementing Regulations on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk. The Implementing Regulations are part of the EU Single Rulebook for banking and insurance aimed at creating a safe and sound regulatory framework consistently applicable across the European Union (EU). The consultation runs until 26 June 2023.

The proposed amendments reflect the outcome of a monitoring exercise on the adequacy of existing mappings, namely those to the credit quality steps (CQS) allocation for four ECAIs and the introduction of new credit rating scales for seven ECAIs as well as the withdrawal of the registration of one ECAI.

In the Implementing Regulations on the mapping of ECAIs, adopted by the European Commission on 11 October 2016, the three ESAs specified an approach that establishes the correspondence between credit ratings and the credit quality steps defined in the Capital Requirements Regulation (CRR) and in the Solvency II Directive.

The ESAs also published individual draft mapping reports illustrating how the methodology was applied to produce the amended mappings in line with the CRR mandate.

Consultation process

Comments to the Consultation Paper on the mapping under Article 136 of the CRR can be sent by clicking on the "send your comments" button on the EBA's consultation page. Comments to the Consultation Paper on the mapping under Article 109 (a) of the Solvency II Directive can be provided by sending an e-mail to 2023Public.Consultation.ECAI.Mapping@eiopa.europa.eu. Please note that the deadline for the submission of comments is 26 June 2023.Next steps

All contributions received will be published following the close of the consultation, unless requested otherwise.

A public hearing on this consultation will take place on the 7 June 2023 from 14:00 to 15:00 CEST. The deadline for registration is 5 June 2023 at 16:00 CEST.

Legal basis and background

The proposed revised draft ITSs have been developed according to Article 136 (1) and (3) of Regulation 575/2013 (Capital Requirements Regulation) and of Article 109 (a) of Directive 2009/138/EC (Solvency II Directive), which state that revised draft ITS  shall be submitted by the ESAs, where necessary.

This change follows a third amendment to the Implementing Regulations, which was proposed by the ESAs in June 2021 and adopted by the European Commission on 16 November 2021. The first amendment reflected the withdrawal of the registration of one ECAI and the recognition of five additional ECAIs since the adoption of the Implementing Regulations in October 2016. The second amendment reflected the outcomes of a monitoring exercise on the adequacy of existing mappings, namely changes to the CQS allocation for two ECAIs and the introduction of new credit rating scales for ten ECAIs. Finally, the third amendment reflected the production of mappings for two newly established ECAIs and the outcomes of a monitoring exercise on the adequacy of existing mappings, namely changes to the CQS allocation for two ECAIs and the introduction of new credit rating scales for nine ECAIs.