The Committee of European Banking Supervisors (CEBS) published for consultation its guidelines for a common approach to the recognition of External Credit Assessment Institutions (ECAIs) under the proposed Capital Requirements Directive (CRD).
The Consultation Paper details the significant convergence that has been achieved among European supervisors over recent months on both procedural and substantive aspects of ECAI recognition. CEBS guidelines set out common procedures which aim at facilitating the recognition of both local and cross-border ECAIs. In addition CEBS has agreed on a common understanding of the criteria for recognition contained in the CRD. These guidelines also provide guidance for supervisors on mapping external credit assessments to the risk weights of the CRD.
Supervisors propose to carry out an overall assessment of ECAIs' eligibility according to the CRD recognition criteria, based on the common understanding set out in this paper and using information identified in a 'common basis application pack'.
CEBS believes that convergence in this area will benefit supervisors, institutions and ECAIs. The joint-assessment process and the common understanding proposed in relation to the substantive aspects of the recognition criteria set out in the guidelines will improve supervisory efficiency and help ensure a level playing field for institutions which will use external credit assessments in the Standardised Approach and in risk-weighting securitisation positions.
The deadline for consultation is 30 September 2005. The final guidelines should be issued by early 2006.
Press release
Consultation document
© CEBS - Committee of European Banking Supervisors
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