Commission Delegated Regulation (EU) 2025/789 supplementing the Capital Requirements Regulation (No 575/3013) (CRR) has been published in the Official Journal of the European Union (OJ). The Delegated Regulation contains regulatory technical standards (RTS) specifying the conditions and indicators that the European Banking Authority (EBA) is to use to determine whether extraordinary circumstances have occurred for the purposes of Articles 325az(5) and 325bf(6) of the CRR. Articles 325bf(6) and 325az(5) of the CRR, as amended by the CRR3 (EU) 2024/1623), enable competent authorities to permit institutions not to comply with certain requirements of the regulatory framework for the use of internal models where the EBA considers that there are extraordinary circumstances. The RTS specify that such circumstances could be recognised where a significant cross-border financial market stress has been observed, or a major regime shift has taken place, that is likely to render the outcome of the back-testing and profit and loss attribution requirements non-representative of the adequacy of the internal model for the calculation of own funds requirements. The RTS also contain a non-exhaustive list of indicators that the EBA is to use to assess whether extraordinary circumstances have occurred. The Delegated Regulation enters into force on 21 August, the twentieth day following its publication in the OJ.
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