CEBS publishes guidelines on implementation of advanced credit and operational risk approaches

The Committee of European Banking Supervisors (CEBS) today publishes its guidelines on the implementation, validation and assessment of the risk management and risk measurement systems used by credit institutions and investment firms applying to move to an advanced approach to calculate their capital requirements.

The new Capital Requirements Directive (CRD) allows institutions to use more risk-sensitive approaches that allow them to estimate their own risk parameters. Institutions that want to use these approaches for regulatory purposes can do so only with the prior approval from their supervisory authority. Before granting this approval, the supervisors have to assess the institutions' validation procedures and control environment. The use of the more risk-sensitive approaches requires