EBA · 2016_2864 Rejected question

Rating of subsidiaries

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
172, para. 1
Topic
Credit risk
Submitted by
Credit institution
Submitted
2016-08-10
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Question

Is “separately rated” in Article 172(1)(d) to be interpreted as “rated on individual information” or as ”having own rating based on a separate rating process”? Alternatively put: How is “separately rated” in Article 172(1)(d) to be interpreted?

Background

The background to the question is to understand whether subsidiaries have to be rated based on individual information (e g capital ratio and market share) or if they can be rated based on their interconnection with the parent company (e.g. committed parental support and subsidiary's importance in group) and the parent company's rating, as long as the subsidiary has an own rating and an own rating process to achieve it according to the bank’s internal policy.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2016_2864

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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