EBA欧洲银行-CEBS-s-advice-on-the-non-eligibility-of-entities-only-producing-credit-scores-for-ECAI-recognition_5页_110kb

CEBS's Advice on Non-Eligibility of Entities Only Producing Credit Scores for ECAI Recognition

Core Content

CEBS (Committee of European Banking Supervisors) has issued advice to the European Commission regarding an amendment to Directive 2006/48/EC. The proposal aims to align the eligibility criteria for External Credit Assessment Institutions (ECAIs) with the regulatory framework governing Credit Rating Agencies (CRAs) under Regulation (EC) No 1060/2009. The key focus is on entities that only produce credit scores, which are not subject to the full CRA registration requirements.

Main Views and Key Information

1. Eligibility of ECAIs

CEBS argues that for an entity to be eligible for ECAI recognition, it must be registered under the Regulation on CRAs, unless it falls under specific exceptions. The only exception is Central Banks, which are excluded from the scope of the Regulation but still eligible for ECAI recognition due to their adherence to the principles of integrity and independence.

2. Entities Only Producing Credit Scores

CEBS believes that entities solely producing credit scores should not be eligible for ECAI recognition. These entities are not subject to the full CRA registration requirements, which may lead to an unlevel playing field and a lack of transparency. From a prudential perspective, such credit scores, which are based purely on statistical models without substantial analytical input, should not be used for capital requirement purposes.

3. Regulatory Consistency

The main objective of CEBS's proposal is to ensure consistency between the ECAI recognition process under the Capital Requirements Directive (CRD) and the Regulation on CRAs. This consistency is necessary to prevent the misuse of credit scores for regulatory purposes, particularly in capital calculations.

4. Prudential Considerations

CEBS emphasizes that credit scores produced by entities not meeting the CRA registration criteria do not meet the necessary standards of objectivity, independence, and transparency required for regulatory use. These scores should not be considered as inputs for the Standardised Approach or the Internal Ratings-Based (IRB) approach in the same way as credit ratings.

5. Recognition Process

CEBS proposes that competent authorities must evaluate the assessment methodology of ECAIs to ensure compliance with the principles of objectivity, independence, ongoing review, and transparency. They must also verify that the resulting credit assessments are credible and transparent. The technical criteria from Annex VI, Part 2 of the Directive are to be taken into account in this evaluation.

6. Cross-Border Recognition

Once an ECAI is recognized as eligible by one competent authority, other competent authorities in Member States may recognize it without conducting their own evaluation. This facilitates cross-border recognition but requires transparency in the recognition process.

7. Public Availability

Competent authorities are required to make public explanations of the recognition process and maintain a list of eligible ECAIs to ensure transparency and market awareness.

CEBS's Proposed Amendments

1. New Paragraph 1a. to Article 81

CEBS proposes adding a new paragraph to Article 81 of Directive 2006/48/EC, which states that an ECAI must be registered under the Regulation on CRAs to be eligible for ECAI recognition, unless it only issues credit ratings under Article 2(2)(d) of the Regulation.

2. Amendment to Article 97

CEBS also proposes a new draft for paragraph 2 of Article 97, which requires competent authorities to assess the compliance of ECAIs with the requirements of Article 81, including technical criteria from Annex VI, Part 2, and their demonstrated ability in securitisation. Additionally, credit assessments used for securitisation purposes must comply with the principles of credibility and transparency as outlined in Annex IX, Part 3.

Conclusion

CEBS's proposals aim to enhance the consistency and prudential soundness of the ECAI recognition process by requiring registration under the Regulation on CRAs, except for Central Banks and entities only producing credit scores. This ensures that only entities meeting strict regulatory standards can be used for capital requirement purposes, thereby protecting the integrity of the financial system.