The European Banking Authority has launched a consultation on draft Regulatory Technical Standards to specify the treatment of equity exposures under the internal ratings-based (IRB) approach. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the European Union.
These RTS propose that competent authorities grant institutions a temporary exemption from IRB treatment of certain equity exposures if such exemption was being applied on the last day of application of the Capital Requirements Directive I (CRD I) - 31 December 2007. This exemption, which was introduced in CRD I to partly relieve institutions’ capital requirement for equity exposures under the IRB approach, will end on 31 December 2017 and is deemed to have immaterial impact in most institutions.
The consultation runs until 7 July 2014