The European Banking Authority (EBA) has published its final regulatory technical standards (RTS) specifying the conditions for assessing the materiality of extensions and changes of internal approaches for credit and operational risk. These RTS will be part of the Single rulebook aimed at enhancing regulatory harmonisation in Europe.

Under the Capital Requirements Regulation (CRR) all institutions shall apply for permission whenever they intend to implement any material extension and change through their internal approaches for credit and operational risk. In this respect, the proposed RTS aim at harmonising the assessment of the materiality of extensions and changes to internal approaches, as well as at ensuring that their approved internal approaches comply with the regulatory requirements.

In particular, these RTS specify the conditions for assessing the materiality of extensions and changes to the Internal Rating Based approach for credit risk and the Advanced Measurement Approach for operational risk. These final RTS have been developed in accordance with Regulation (EU) No. 575/2013 known as the Capital Requirements Regulation. The final standards have been sent to the European Commission for their adoption as EU Regulations that will be directly applicable throughout the EU.