On November 12, 2014, the European Banking Authority (“EBA”) issued a consultation paper on draft RTS on the assessment methodology for the internal ratings based (“IRB”) approach under the Capital Requirements Regulation (“CRR”). Under the CRR, powers are given to national regulators to allow banks that meet certain conditions to use the IRB approach to estimate their own funds requirements for credit risk. The draft RTS set out standards on the methodology that is to be used by national regulators to assess whether a firm is compliant with the requirements necessary to use the IRB approach, for example, when a firm seeks to apply to use the IRB approach. Regulators will also use the RTS to assess on an ongoing basis whether firms meet the IRB approach requirements. The consultation closes on March 12, 2015.

The consultation paper is available at: