RTS: Modellability of risk factors under Internal Model Approach (IMA)

This regulation sets out the technical standards for how banks assess whether specific risk factors can be accurately modeled using the Internal Model Approach (IMA). It ensures that banks use consistent and reliable criteria when calculating the capital they must hold to cover potential financial losses.

This primarily affects large banks and credit institutions that use internal models for risk management. It introduces stricter requirements for the frequency and methodology of these assessments to improve financial stability.