Where its jurisdiction allows external ratings, the bank may rely only on assessments from rating agencies that the supervisor has recognised as ECAIs against the eight criteria of objectivity, independence, transparency, disclosure, resources, credibility, no abuse of unsolicited ratings and supervisory cooperation; a methodology must have been in place for at least one year, preferably three (CRE21.1 to 21.4). The bank must nominate ECAIs and use them consistently for all exposure types for both risk weights and risk management, without cherry-picking or switching (CRE21.8). With two ratings mapping to different weights it takes the higher; with three or more it refers to the two lowest weights and takes the higher of those (CRE21.9 to 21.11). Issue ratings apply to the rated issue; a high-quality issue or issuer rating extends to unrated claims only if they rank pari passu or senior, while low-quality ratings extend to pari passu or junior claims (CRE21.12 to 21.14). Foreign currency ratings apply to foreign currency exposures (CRE21.15). Short-term ratings are issue-specific, map to 20%, 50%, 100% or 150%, and constrain unrated short-term claims (CRE21.16 to 21.19). Ratings of one group entity cannot be used for another, and unsolicited ratings need supervisory permission (CRE21.20 to 21.21).
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.