A firm must have internal methodologies that:
(1) enable it to assess the credit risk of exposures to individual
obligors, securities or securitisation positions and credit risk at the portfolio level;
(2) do not rely solely or mechanistically on external credit ratings; and
(3) where its own funds requirements under Part Three of the CRR are
based on a rating by an ECAI or based on the fact that an exposure is
unrated, enable the firm to consider other relevant information for
assessing its allocation of financial resources and internal capital.
[Note: Art 79(b) of the CRD]