CP10 (Full Document) - European Banking Authority

17. These guidelines are the product of the first phase of CEBS’s work on
the implementation, validation, and assessment of AMA and IRB
approaches. CEBS intends to begin work, as soon as is practical, on a
second phase, which would provide more detailed guidance on
specific issues.
18. The guidelines do not contain detailed requirements relating to IT
systems architecture, contingency plans, data integrity, or physical
security. The relevance of these topics goes well beyond the
calculation of regulatory capital requirements. It was not considered
necessary to address these issues in detail in guidelines that focus
specifically on AMA and IRB matters. While the guidelines do contain
some references to basic principles in these areas, it is expected that
supervisors will consider them as part of their broader assessment of
the institution's overall control structure.
1.3. Addressees/Scope of application
19. These guidelines are drafted as guidance to supervisors, elaborating
on the CRD Articles and Annexes. However, since the guidelines
express CEBS’s expectations on how national supervisory authorities
should deal with the implementation and assessment of AMA and IRB
approaches, it is clear that they also affect the institutions using
these approaches.
20. Article 20 of recast Directive 93/6/EEC – like the current version of
93/6/EEC – extends the credit risk and operational risk capital
requirements of Directive 2000/12/EC to investment firms. While the
requirements for credit institutions and investment firms are not
completely identical (for operational risk, there are significant
modifications to take account of the specific features of the
investment firm sector, with an option to continue the ‘Expenditure
Based Requirement’ for investment firms falling into the low­,
medium­ and medium/high­risk categories), such differences are the
exception rather than the rule. Accordingly, the guidelines use the
term ‘institutions’ (referring to both credit institutions and
investment firms) rather than ‘credit institutions,’ although the latter
is the official term used in the recast Directive 2000/12/EC 3 .
21. In order to maintain a level playing field, these guidelines apply not
only to large cross­border groups, but also to other institutions. It is
expected, however, that national supervisory authorities will take the
principle of proportionality (proportionate to the nature, size, risk
profile, and complexity of the institution) into account. Supervisors
should bear in mind, however, that even smaller and less complex
institutions that have chosen to apply for the use of the AMA or IRB
3 Except where noted otherwise, all references to Articles of the CRD are references to the
recast Directive 2000/12/EC.
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