IRB use requires explicit supervisory approval and the bank must classify banking-book exposures into corporate (with five specialised lending sub-classes), sovereign, bank, retail (mortgages, QRRE and other retail) and equity classes, demonstrating a consistent method (CRE30.1 to 30.26). Small business exposures qualify as retail only below EUR 1 million; QRRE requires unsecured revolving exposures to individuals of EUR 100,000 or less, split into transactors (12 months of full repayment) and revolvers (CRE30.20 to 30.25). The IRB approach is not permitted for equity, and advanced IRB cannot be used for corporates in groups with consolidated revenues above EUR 500 million (three-year average from audited statements) or for banks and other financial institutions (CRE30.34 to 30.35, 30.43). Once adopted for part of an asset class, IRB must extend across it under a supervisor-agreed rollout plan; immaterial exposures may stay standardised and return to simpler approaches needs supervisory approval in extraordinary cases (CRE30.45 to 30.52). The bank must use the prescribed functions: defaulted exposures take K as LGD less best-estimate EL, times 12.5 (CRE31.3); a 1.25 correlation multiplier applies to regulated financial institutions with assets of USD 100 billion or more and all unregulated ones (CRE31.7); the SME firm-size adjustment uses sales between EUR 5 million and EUR 50 million (CRE31.8); HVCRE and retail have separate functions (CRE31.11 to 31.16).
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.