Table of Contents
Document Overview
CRE21 Standardised approach: use of external ratings (paras. 21.1-21.18) (effective as of 1 January 2023)
This chapter sets out for the standardised approach to credit risk the conditions to recognise an external credit assessment institution and related implementation considerations.
Version effective as of 01 Jan 2023
Changes due to the December 2017 Basel III publication and the revised implementation date announced on 27 March 2020.
Recognition of external ratings by national supervisors
The recognition process
21.1 In jurisdictions that allow the use of external ratings for regulatory purposes, only credit assessments from credit rating agencies recognised as external credit assessment institutions (ECAIs) will be allowed. National supervisors are responsible for determining on a continuous basis whether an ECAI meets the criteria listed in CRE21.2 and recognition should only be provided in respect of ECAI ratings for types of exposure where all criteria and conditions are met. National supervisors should also take into account the criteria and conditions provided in the International Organization of Securities Commissions' Code of Conduct Fundamentals for Credit Rating Agencies when determining ECAI eligibility. The supervisory process for recognising ECAIs should be made public to avoid unnecessary barriers to entry.
Eligibility criteria
21.2 An ECAI must satisfy each of the following eight criteria.