What changed between the plenary report and the adopted text

Removed:▌

Removed:12. For exposures in the form of shares or units in a CIU belonging to the exposure class referred to in Article 147(2), point (e1), institutions shall apply the treatment set out in Article 152, unless deducted from own funds, the risk-weighted exposure amounts for credit risk shall be calculated in accordance with Article 152 except where those exposures are deducted from Common Equity Tier 1 items, Additional Tier 1 items or Tier 2 items.

Removed:13. EBA shall develop draft regulatory technical standards to further specify the treatment set out in this Chapter that is applicable to exposures in the form of purchased receivables’ referred to in Articles 153 and 154, for the purposes of calculating risk-weighted exposure amounts for the default risk and for the dilution risk of those exposures, including for the recognition of credit risk mitigation techniques.

Removed:EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2025.

Removed:Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed:(65) in Article 152, paragraph 4 is replaced by the following:

Removed:‘4. Institutions that apply the look-through approach in accordance with paragraphs 2 and 3 of this Article and that do not use the methods set out in this Chapter or in Chapter 5 as applicable for all or parts of the underlying exposures of the CIU, shall calculate risk-weighted exposure amounts and expected loss amounts for those parts of the underlying exposures in accordance with the following principles:

Removed:(a) for underlying exposures that would be assigned to the equity exposure class referred to in Article 147(2), point (e), institutions shall apply the Standardised Approach laid down in Chapter 2;

Removed:(b) for exposures assigned to the items representing securitisation positions referred to in Article 147(2), point (f), institutions shall apply the treatment set out in Article 254 as if those exposures were directly held by those institutions;

Removed:(c) for all other underlying exposures, institutions shall apply the Standardised Approach laid down in Chapter 2.’;

Removed:(66) Article 153 is amended as follows:

Removed:(a) paragraph 1, point (iii) is replaced by the following:

Removed:‘(iii) if 0 < PD < 1, then:

Removed:where:

Removed:N = the cumulative distribution function for a standard normal random variable, i.e. N(x) equals the probability that a normal random variable with mean of 0 and variance of 1, is less than or equal to x;

Removed:G = the inverse cumulative distribution function for a standard normal random variable, i.e. if x = G(z), x is the value such that N(x) = z;

Removed:R = the coefficient of correlation, which is defined as:

Removed:b = the maturity adjustment factor, which is defined as:

Removed:M = the maturity and shall be expressed in years and determined in accordance with Article 162.’;

Removed:(b) paragraph 2 is replaced by the following:

Removed:‘2. For exposures to large regulated financial sector entities and to unregulated financial sector entities, the coefficient of correlation R provided in paragraph 1, point (iii), or paragraph 4 as applicable, shall be multiplied by 1,25 when calculating the risk weights of those exposures.’;

Removed:(c) paragraph 3 is deleted;

Removed:(d) paragraph 9 is replaced by the following:

Removed:‘9. EBA shall develop draft regulatory technical standards to specify how institutions shall take into account the factors referred to in paragraph 5, second subparagraph, when assigning risk weights to specialised lending exposures.

Removed:EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2025.

Removed:Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed:(67) Article 154 is amended as follows:

Removed:(a) in paragraph 1, point (ii) is replaced by the following:

Removed:‘(ii) if PD < 1, then:

Removed:where:

Removed:N = the cumulative distribution function for a standard normal random variable, i.e. N(x) equals to the probability that a normal random variable with mean of 0 and variance of 1, is less than or equal to x;

Removed:G = the inverse cumulative distribution function for a standard normal random variable, i.e. if x = G(z), x is the value such that N(x) = z;

Removed:R = the coefficient of correlation, which is defined as:

Removed:’;

Removed:(b) paragraph 2 is deleted;

Removed:(c) paragraph 3 is replaced by the following:

Removed:‘3. For retail exposures that are not in default and are secured or partly secured by residential property, a coefficient of correlation R of 0,15 shall replace the figure produced by the coefficient of correlation formula in paragraph 1.

Removed:The risk-weight calculated for an exposure partly secured by residential property pursuant to paragraph 1, point (ii), taking into account a coefficient of correlation R as set out in the first subparagraph of this paragraph, shall be applied both to the secured and the unsecured portion of the underlying exposure.’;

Removed:(d) paragraph 4 is replaced by the following:

Removed:‘4. For QRREs that are not in default, a coefficient of correlation R of 0,04 shall replace the figure produced by the coefficient of correlation formula in paragraph 1.

Removed:Competent authorities shall review the relative volatility of loss rates across QRREs belonging to the same type of exposures, as well as across the aggregate QRRE exposure class, and shall share information on the typical characteristics of qualifying revolving retail loss rates across Member States and with EBA.’;

Removed:(68) Article 155 is deleted;

Removed:(69) in Article 157, the following paragraph 6 is added:

Removed:‘6. EBA shall develop draft regulatory technical standards to specify further:

Removed:(a) the methodology for the calculation of risk-weighted exposure amount for dilution risk of purchased receivables, including recognition of credit risk mitigation in accordance with Article 160(4), and the conditions for the use of own estimates and fall-back parameters;

Removed:(b) the assessment of the immateriality criterion for types of exposures referred to in paragraph 5;

Removed:EBA shall submit those draft regulatory technical standards to the Commission by 31 December 2025.

Removed:Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed:(70) Article 158 is amended as follows:

Removed:(a) in paragraph 5, the last subparagraph is deleted;

Removed:(b) paragraphs 7, 8 and 9 are deleted.

Removed:(71) Article 159 is replaced by the following:

Removed:‘Article 159 Treatment of expected loss amounts, IRB shortfall and IRB excess

Removed:Institutions shall subtract the expected loss amounts of exposures referred to in Article 158, paragraphs 5, 6 and 10 from the sum of all of the following:

Removed:(a) the general and specific credit risk adjustments related to those exposures, calculated in accordance with Article 110;

Removed:(b) additional value adjustments related to the non-trading book business of the institution determined in accordance with Articles 34, related to those exposures;

Removed:(c) other own funds reductions related to those exposures other than the deductions made in accordance with Article 36(1), point (m).

Removed:Where the calculation performed in accordance with the first subparagraph results in a positive amount, the amount obtained shall be called ‘IRB excess’. Where the calculation performed in accordance with the first subparagraph results in a negative amount, the amount obtained shall be called ‘IRB shortfall’.

Removed:For the purposes of the calculation referred to in the first paragraph, institutions shall treat discounts ▌determined in accordance with Article 166(1) on balance sheet exposures purchased when in default in the same manner as specific credit risk adjustments. Discounts or premiums on balance sheet exposures purchased when not in default shall not be allowed to be included in the calculation of the IRB shortfall or IRB excess. Specific credit risk adjustments on exposures in default shall not be used to cover expected loss amounts on other exposures. Expected loss amounts for securitised exposures and general and specific credit risk adjustments related to those exposures shall not be included in the calculation of the IRB shortfall or IRB excess.’;

Removed:(72) in Section 4, the following Sub-Section 0 is inserted: