EBA Publishes Final Draft ITS on Internal Model Authorisation Under CRR III Regulation

The European Banking Authority (EBA) has today released its final draft Implementing Technical Standards (ITS), introducing amendments to the Implementing Regulation governing the joint decision process for internal model authorisation under the Capital Requirements Regulation (CRR). These changes align with updates to the EU legal framework and mark the first phase of the EBA’s roadmap for implementing the EU Banking Package.

Key Amendments to Regulation

The revised ITS introduce significant changes to the internal model authorisation process, including:

• Updated scope of internal models: Under CRR III, the application of internal models for operational risk has been removed. Consequently, references to the Advanced Measurement Approach (AMA) have been deleted.

• Alignment with supervisory frameworks: The ITS now incorporate updated references to the ITS and Regulatory Technical Standards (RTS) on supervisory colleges, ensuring consistency with the revised supervisory colleges regulatory framework.

Legal Basis

These final draft ITS have been developed in accordance with Article 20(8) of Regulation (EU) 575/2013 (CRR), as recently amended by Regulation (EU) 2024/1623. The amendments specifically address regulatory requirements concerning credit risk, credit valuation adjustment risk, operational risk, market risk, and the output floor.

This latest development reflects the EBA’s commitment to ensuring harmonised and effective supervisory practices across the EU financial sector.

Read the press release here.