Art. 113 - Credit Risk Standard Approach (KSA): Article 113 of CRR III refers to the Credit Risk Standard Approach (KSA), which is one of the methods for determining risk-weighted position amounts in banking regulation. This approach aims to adequately quantify the credit risk of banks by categorizing risk positions into predefined categories such as corporates or retail and then determining credit quality weights based on external ratings or other criteria. Article 113 defines the requirements and procedures for applying the KSA in accordance with European regulations, contributing to ensuring adequate capital backing for credit risks.
CRR III Art. 121 - Equity Requirements and Risk Weighting for Credit Institutions: Article 121 of CRR III addresses equity requirements and risk weighting for credit institutions. This article establishes detailed provisions that credit institutions must follow to build adequate capital buffers for various types of risks, including credit risks. It also defines the criteria and methods for risk weighting of credit positions, based on external ratings, internal models, or other factors. Article 121 is a crucial component of CRR III, contributing to the stability of the European financial system by precisely defining capital requirements for credit institutions and regulating the risk assessment of credit portfolios.
CRR III is part of the comprehensive European framework for regulating the banking sector and aims to implement the international standards of Basel III within the European Union. It contains detailed provisions regarding the equity and liquidity requirements of financial institutions and undergoes occasional updates to adapt to changing economic and regulatory circumstances.
