Changes from plenary report to adopted text

Removed(iii) the following paragraph 5a is inserted:

Removed‘5a. Retail exposures belonging to a type of exposures meeting all the following conditions shall be assigned to the QRRE exposure class:

Removed(a) the exposures of that type of exposures are to one or more natural persons;

Removed(b) the exposures of that type of exposures are revolving, unsecured, and to the extent they are not drawn immediately and unconditionally, cancellable by the institution;

Removed(c) the maximum exposure of that type of exposure to a natural person is EUR 100 000▌;

Removed(d) that type of exposures has exhibited low volatility of loss rates, relative to its average level of loss rates, especially within the low PD bands;

Removed(e) the treatment of exposures assigned to that type of exposures as a qualifying revolving retail exposure is consistent with the underlying risk characteristics of that type of exposures▌.

RemovedBy way of derogation from point (b), the requirement to be unsecured shall not apply in respect of collateralised credit facilities linked to a wage account. In that case, amounts recovered from the collateral shall not be taken into account in the LGD estimate.

RemovedInstitutions shall identify within the QRRE exposure class transactor exposures (‘QRRE transactors’), as defined in Article 4(1), point (152), and exposures that are not transactor exposures (‘QRRE revolvers’). In particular, QRREs with less than 12 months of repayment history shall be identified as QRRE revolvers.’;

Removed(f) paragraphs 6 and 7 are replaced by the following:

Removed‘6. Unless they are assigned to the exposure class laid down in paragraph 2, point (e1), the exposures referred to in Article 133, paragraph 1 shall be assigned to the equity exposure class laid down in paragraph 2, point (e).

Removed7. Any credit obligation not assigned to the exposure classes laid down in paragraph 2, points (a), (a1), (b), (d), (e) and (f), shall be assigned to one of the exposure classes referred to in point (c) of that paragraph.’;

Removed(g) in paragraph 8, the following subparagraphs are added:

Removed‘Those exposures shall be assigned to the exposure class referred to in paragraph 2, point (c)(ii), and shall be distributed into the following categories: ‘project finance’ (PF), ‘object finance’ (OF), ‘commodity finance’ (CF) and ‘income producing real estate’ (IPRE).

RemovedEBA shall develop draft regulatory technical standards to specify the following:

Removed(a) the categorisation to PF, OF and CF, consistently with the definitions of Chapter 2;

Removed(b) the determination of the IPRE category, in particular providing which ADC exposures and exposures secured by immovable property, may or shall be categorised as IPRE, where those exposures do not materially depend on cash flows generated by the property for their repayment.

RemovedEBA shall submit those draft regulatory technical standards to the Commission by 31 December 2025.

RemovedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed(h) a new paragraph 11 is added:

Removed‘11. EBA shall develop draft regulatory technical standards specifying further the exposure classes referred to in paragraph 2 where necessary▌.

RemovedEBA shall submit those draft regulatory technical standards to the Commission by 31 December 2026.

RemovedPower is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed(62) Article 148 is amended as follows:

Removed(a) paragraphs 1 and 2 are replaced by the following:

Removed‘1. An institution that is permitted to apply the IRB Approach in accordance with Article 107(1), shall, together with any parent undertaking and its subsidiaries, implement the IRB Approach for at least one of the exposure classes referred to in points (a), (a1)(i), (a1)(ii), (b), (c)(i), (c)(ii), (c)(iii), (d)(i), (d)(ii), d(iii), (d)(iv), (e1), ▌and (g) of Article 147(2). Once an institution has implemented the IRB Approach for a certain exposure class, it shall do so for all the exposures within that exposure class, unless it has received the permission of the competent authorities to use the Standardised Approach permanently in accordance with Article 150.

RemovedSubject to the prior permission of the competent authorities, implementation of the IRB Approach may be carried out sequentially across the different types of exposures within a certain exposure class or business unit, or across different business units in the same group, or for the use of own estimates of LGDs or the use of IRB-CCFs.

Removed2. Competent authorities shall determine the time period over which an institution and any parent undertaking and its subsidiaries shall be required to implement the IRB Approach for all exposures within a certain exposure class across different types of exposures within the same business unit, across different business units in the same group or for the use of own estimates of LGDs or the use of IRB-CCF as applicable. That time period shall be one that competent authorities consider to be appropriate on the basis of the nature and scale of the activities of the institution concerned, or any parent undertaking and its subsidiaries, and the number and nature of rating systems to be implemented.’;

Removed(aa) paragraph 3 is replaced by the following:

Removed‘3. Institutions shall carry out implementation of the IRB Approach in accordance with conditions determined by the competent authorities. The competent authority shall design those conditions in a way that they ensure that the flexibility under paragraph 1 is not used selectively for the purpose of achieving reduced own funds requirements in respect of those types of exposures or business units that are yet to be included in the IRB Approach or in the use of own estimates of LGDs or the use of IRB-CCF.’;

Removed(b) paragraphs 4, 5 and 6 are deleted;

Removed(63) Article 150 is amended as follows:

Removed(a) paragraph 1 is replaced by the following:

Removed‘1. Institutions shall apply the Standardised Approach for all the following exposures:

Removed(a) exposures assigned to the equity exposure class referred to in Article 147(2), point (e);

Removed▌

Removed(c) exposures assigned to a certain exposure class for which institutions have not received the prior permission of the competent authorities to use the IRB Approach for the calculation of the risk-weighted exposure amounts and expected loss amounts.

RemovedAn institution that is permitted to use the IRB Approach for the calculation of risk-weighted exposure amounts and expected loss amounts for a given exposure class may, subject to the competent authority’s prior permission, apply the Standardised Approach for some types of exposures within that exposure class where those types of exposures are immaterial in terms of size and perceived risk profile.

RemovedIn addition to the exposures referred to in the second subparagraph, an institution may, subject to the competent authorities prior permission apply the Standardised Approach for the following exposures where the IRB Approach is applied for other types of exposures within the respective exposure class:

Removed(a) some types of exposures within that exposure class, including exposures from foreign branches and different product groups, where those types of exposures are immaterial in terms of size and perceived risk profile;

Removed(b) exposures to central governments and central banks of the Member States and their regional governments, local authorities, administrative bodies and public sector entities provided that:

Removed(i) there is no difference in risk between the exposures to that central government and central bank and those other exposures because of specific public arrangements; and

Removed(ii) exposures to central governments and central banks are assigned a 0% risk weight under Article 114(2) or (4);

Removed(c) exposures of an institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking provided that the counterparty is an institution or a financial holding company, mixed financial holding company, financial institution, asset management company or ancillary services undertaking subject to appropriate prudential requirements or an undertaking linked by a relationship within the meaning of Article 22(7) of Directive 2013/34/EU;

Removed(d) exposures between institutions which meet the requirements set out in Article 113(7);

RemovedAn institution that is permitted to use the IRB Approach for the calculation of risk-weighted exposure amounts for the exposures referred to in the second subparagraph, shall apply the Standardised Approach for the remaining types of exposures within that exposure class.’;

Removed(aa) paragraph 2 is replaced by the following:

Removed‘EBA shall, in accordance with Article 16 of Regulation (EU) No 1093/2010, issue guidelines by 31 December 2025 on what constitutes types of exposures that are immaterial in terms of size and perceived risk profile.’;

Removed(b) paragraphs ▌3 and 4 are deleted;

Removed(64) Article 151 is amended as follows:

Removed(a) paragraph 4 is deleted;

Removed(b) paragraph 7, 8 and 9 are replaced by the following:

Removed‘7. For retail exposures, institutions shall provide own estimates of LGDs, and IRB-CCF where applicable pursuant to Article 166, paragraphs 8 and 8b, in accordance with Article 143 and Section 6. Institutions shall use SA-CCF where Article 166, paragraphs 8 and 8b do not allow for the use of IRB-CCF.

Removed8. For the following exposures, institutions shall apply the LGD values set out in Article 161(1) and SA-CCF in accordance with Article 166, paragraphs 8, 8a and 8b:

Removed(a) exposures assigned to the exposure class ‘exposures to institutions’ referred to in Article 147(2), point (b);

Removed(b) exposures to financial sector entities;

Removed(c) exposures to large corporates not assigned to the exposure class referred to in Article 147(2), point (c)(ii).

RemovedFor exposures belonging to the exposure classes referred to in Article 147(2), points (a), (a1) and (c), except for the exposures referred to in the first subparagraph of this paragraph, institutions shall apply the LGD values set out in Article 161(1), and the SA-CCF in accordance with Article 166, paragraphs 8, 8a and 8b, unless they have been permitted to use their own estimates of LGDs and CCFs for those exposures in accordance with paragraph 9 of this Article.

Removed9. For the exposures referred to in paragraph 8, second subparagraph the competent authority shall permit institutions to use own estimates of LGDs, and IRB-CCFs where applicable pursuant to Article 166, paragraphs 8 and 8b, in accordance with Article 143 and Section 6.’;

Removed(c) the following paragraphs ▌12 and 13 are added: