The External Credit Assessment Institutions have been introduced by the Basel II Framework for the International Convergence of Capital Measurement and Capital Standards (Basel II). The New Accord provides that banks may use assessments by external credit assessment institutions recognized by national supervisors as eligible to determine the risk weights in the standardized approach for capital purposes. Paragraphs 90 to 108 of the Basel Framework include the criteria for recognizing rating agencies, the usability of external ratings and the mapping process. These criteria have been implemented in the EU in the provisions of the Capital Requirements Directive (CRD), whose interpretation has been latterly clarified by the Guidelines on the recognition of External Credit Assessment Institutions (ECAIs) issued on 20 January 2006 by the Committee of European Banking Supervisors (CEBS). In particular, the CRD allows Member States to recognise an ECAI as eligible in two ways: direct recognition, in which the competent authority carries out its own assessment of the ECAI’s compliance with the CRD’s eligibility criteria; and indirect recognition, in which the competent authority recognizes the ECAI without carrying out its own evaluation, but by relying instead on the recognition of the ECAI by the competent authority of another Member State. In Italy, the criteria for the recognition of ECAIs are set out by the "New regulations for the prudential supervision of banks" (Circular no. 263 of 27 December 2006). Since 2010, the following institutions have obtained the ECAI status in Italy: Fitch Ratings, Moody's Investors Service Ltd., Standard & Poor's Rating Services and Cerved Group (formerly Lince).
Editor: Bianca GIANNINI