Regulatory Alerts2016-01-28
Regulation on the Use of External Credit Assessments for Calculating Regulatory Capital
The Board of the Central Bank of the Republic of Kosovo issued this regulation to establish standardized rules for licensed banks using external credit assessments to calculate regulatory capital requirements under Basel Pillar I. It mandates that banks utilize only CBK-recognized external credit assessment institutions, outlining direct and indirect recognition pathways alongside strict technical criteria for objectivity, independence, and transparency. The framework further dictates how banks must consistently map these assessments to risk weights, handle multiple or short-term ratings, and apply domestic versus foreign currency exposures, with full compliance required within three months of the February 2016 effective date.
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