Article 143 Permission to use the IRB ApproachX1

Where the conditions set out in this Chapter are met, the competent authority shall permit institutions to calculate their risk-weighted exposure amounts using the Internal Ratings Based Approach (hereinafter referred to as ‘ IRB Approach ’ ).

Prior permission to use the IRB Approach, including own estimates of LGD and conversion factors, shall be required for each exposure class and for each rating system and internal models approaches to equity exposures and for each approach to estimating LGDs and conversion factors used.

Institutions shall obtain the prior permission of the competent authorities for the following:

The range of application of a rating system shall comprise all exposures of the relevant type of exposure for which that rating system was developed.

Institutions shall notify the competent authorities of all changes to rating systems and internal models approaches to equity exposures.

F1The F2PRA may make technical standards to specify the conditions for assessing the materiality of the use of an existing rating system for other additional exposures not already covered by that rating system and changes to rating systems or internal models approaches to equity exposures under the IRB Approach.

F3...