Finansinspektionen (FI) is encouraging institutions that apply the IRB approach to analyse their rating systems to ensure that these systems meet forthcoming new requirements. Under the new requirements, Swedish institutions will need to change their rating methods. Such changes require FI’s approval.
The regulations for the IRB approach are going to be amended in a number of areas. The change work is being headed by the European Banking Authority (EBA) according to the Capital Requirements Regulation (CRR)1.
The overall goal is to put into place clearer regulatory requirements; requirements that are fair and comparable between institutions.
In this memorandum, FI describes important areas where the regulation is being clarified. The memorandum also discusses FI's expectations for how the institutions should implement the methodology changes that are expected once the regulations are amended. The aim is to ensure that adaptations to the new requirements are implemented efficiently, transparently and uniformly.