# Commission Delegated Regulation (EU) 2017/180 of 24 October 2016 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards for benchmarking portfolio assessment standards and assessment-sharing procedures (Text with EEA relevance), Article 8: Assessment standards for internal approaches for credit risk specific to the LDP

Extent: E+W+S+N.I.

1. When carrying out an assessment referred to in Article 3(1) relating to the LDP counterparties set out in template 101 of Annex I of Implementing Regulation (EU) 2016/2070, competent authorities shall assess whether the differences between the own funds requirements for credit risk of an institution and those of its peers are driven by any of the following:
(a) different rank ordering of the counterparties included in the LDP samples or different PD levels assigned to each grade;
(b) specific facility types, collateral instruments or location of the counterparties;
(c) heterogeneity in the PDs, LGDs, maturities or conversion factors;
(d) collateralisation practices;
(e) level of independency from external ratings assessment and frequency in the internal rating update.
2. Where an institution classifies a counterparty as ‘defaulted’ while other institutions classify it as ‘performing’, or vice versa, competent authorities shall apply the approach referred to in paragraph 1 to that counterparty.

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Source: https://www.legislation.gov.uk/eur/2017/180/article/8 (the official version)
Page: https://openlegislation.uk/eu-regulation-2017-180/article-8
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.