European Banking Decision on Quality of Certain Unsolicited Credit Assessments of External Credit Assessment Institutions 

A Decision of the European Banking Authority on unsolicited credit assessments was published in the Official Journal of the European Union. The EBA decided that unsolicited credit assessments of certain External Credit Assessment Institutions (ECAIs) did not differ from their solicited credit assessments. An ECAI is a credit rating agency that has been registered or certified under the EU CRA Regulation or a central bank issuing credit ratings which are exempt from the application of the CRA Regulation. 

The Capital Requirements Regulation permits the use of unsolicited credit assessments of an ECAI for the determination of risk weights to be assigned to assets and off-balance sheet items for the purpose of the calculation of own funds requirements. The use of such assessment is subject to confirmation by the EBA that the unsolicited credit assessment does not differ in quality from solicited credit assessments of that same ECAI. The EBA is required to refuse of revoke this confirmation in particular if the ECAI has used an unsolicited credit assessment to put pressure on the rated entity to place an order for a credit assessment or other services. The EBA has decided that 22 ECAIs’ unsolicited credit assessments do not differ from their solicited credit assessments for the purpose of calculating own funds requirements, including Fitch Ratings, Moody's Investors Service and Standard & Poor's Ratings Service. 

The decision entered into force on August 11, 2016. 

View the EBA decision.