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The context of article 4 of the Delegated Regulation indicates that article 4(5) only applies to the standard formula. Article 4 is in section 2 (“External credit assessments”) of chapter 1, introduced by article 3, which sets the context referring to article 109a on the use of own credit assessments in the standard formula. In addition, article 4 paragraphs 1, 2 and 6 explicitly refer to the standard formula. The first sentence of article 4 (5) also applies to the standard formula by referring to the seven credit quality steps introduced in article 3.Furthermore, recital (4) defines the motivation for setting up the rules on own credit quality assessment: the recital clearly defines the motivation of a requirement as given by article 4(5) and only addresses the standard formula with the intention to avoid biased estimations of credit risk.Unlike the Standard Formula, internal models and thus credit modelling are subject to approval, and therefore the methods to calculate the Solvency Capital Requirement using own credit quality assessments are under supervisory control. The recital should be read in this context.