Regulatory Alerts2026-01-01
Final Report on Draft RTS on Assessing Materiality of IRB Model Changes
The European Banking Authority issued this final report to amend the Regulatory Technical Standards governing the assessment of materiality for changes to Internal Ratings Based models. The revisions aim to enhance supervisory efficiency by reducing the volume of material model changes through stronger reliance on quantitative thresholds and the removal of obsolete references to equity and operational risk approaches. Consequently, many previously material qualitative changes are reclassified as non-material subject to notification, while only fundamental alterations to default definitions, model redevelopment, or risk quantification methods retain mandatory prior approval status.
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