in force 2025-01-01 MODIFIED+915 −560§
Amended by Regulation (EU) 2024/1623 32024R1623 · Regulation (EU) 2024/2987 32024R2987 · Regulation (EU) 2024/2795 32024R2795
applies from: unchanged
Paragraph 1 now requires an institution permitted to apply the IRB Approach under Article 107(1) to implement it, together with any parent undertaking and its subsidiaries, for at least one of a specifically enumerated set of exposure classes and sub-classes, and specifies that once implemented for a certain type of exposures within an exposure class it must be implemented for all exposures within that class, whereas the prior text simply required implementation for all exposures unless permission to use the Standardised Approach permanently had been granted.
The sequencing rule in paragraph 1 has been reworded to permit sequential implementation across different types of exposures within a certain exposure class, and refers to use of own estimates of LGD or use of IRB-CCF, replacing the prior reference to sequential implementation across exposure classes, correlations categories, and own estimates of LGDs or conversion factors for corporates, institutions and central governments and central banks.
Paragraphs 2 and 3 have been reworded to refer to types of exposures within an exposure class and to use of own estimates of LGD or IRB-CCF, replacing the earlier language about exposure classes and own estimates of LGDs and conversion factors.
Cited: Art. 148, v1 · Art. 148, v2
text before / after
02013R0575-20240709 → 02013R0575-20250101
Article 148
Conditions for implementing the IRB Approach across different classes of exposure and business units
1. Institutions and An institution that is permitted to apply the IRB Approach in accordance with Article 107(1) shall, together with any parent undertaking and its subsidiaries shall subsidiaries, implement the IRB Approach for at least one of the exposure classes referred to in Article 147(2), point (a), point (aa)(i) or (ii), point (b), point (c)(i), (ii) or (iii), point (d)(i), (ii), (iii) or (iv), or point (g). Once an institution has implemented the IRB Approach for a certain type of exposures within an exposure class, it shall do so for all exposures, exposures within that exposure class, unless they have it has received the permission of the competent authorities authority to permanently use the Standardised Approach permanently in accordance with Article 150.
Subject to the prior permission of the competent authorities, implementation of the IRB Approach may be carried out sequentially across the different types of exposures within a certain exposure classes referred to in Article 147 class within the same business unit, unit and across different business units in the same group group, or for the use of own estimates of LGDs LGD or conversion factors for the calculation use of risk weights for exposures to corporates, institutions, and central governments and central banks.
In the case of the retail exposure class referred to in Article 147(5), implementation may be carried out sequentially across the categories of exposures to which the different correlations in Article 154 correspond. IRB-CCF.
2. Competent authorities shall determine the time period over which an institution and any parent undertaking and its subsidiaries shall be required to implement the IRB Approach for all exposures. This time exposures within a certain exposure class across different types of exposures within the same business unit and across different business units in the same group, or for the use of own estimates of LGD or for the use of IRB-CCF. That period shall be one that competent authorities consider to be appropriate on the basis of the nature and scale of the activities of the institutions, institution concerned, or of any parent undertaking and its subsidiaries, and the number and nature of rating systems to be implemented.
3. Institutions shall carry out implementation of the IRB Approach in accordance with conditions determined by the competent authorities. The competent authority shall design those conditions such in a way that they ensure that the flexibility under paragraph 1 is not used selectively for the purposes purpose of achieving reduced own funds requirements in respect of those exposure classes types of exposures or business units that are yet to be included in the IRB Approach or in the use of own estimates of LGDs and conversion factors. LGD or in the use of IRB-CCF.
4. Institutions that have begun to use the IRB Approach only after 1 January 2013 or that have until that date been required by the competent authorities to be able to calculate their capital requirements using the Standardised Approach shall retain their ability to calculate capital requirements using the Standardised Approach for all their exposures during the implementation period until the competent authorities notify them that they are satisfied that the implementation of the IRB Approach will be completed with reasonable certainty.
5. An institution that is permitted to use the IRB Approach for any exposure class shall use the IRB Approach for the equity exposure class laid down in point (e) of Article 147(2), except where that institution is permitted to apply the Standardised Approach for equity exposures pursuant to Article 150 and for the other non credit-obligation assets exposure class laid down in point (g) of Article 147(2).
6. EBA shall develop draft regulatory technical standards to specify the conditions according to which competent authorities shall determine the appropriate nature and timing of the sequential roll out of the IRB Approach across exposure classes referred to in paragraph 3.
EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2014.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.