The IRB approach, including own estimates of loss given default and conversion factors, may be used only with the competent authority's prior permission for each exposure class, each rating system and each approach to estimating LGDs and CCFs. Material changes to the range of application of a permitted rating system, or to the system itself, need prior permission, and all changes must be notified. Institutions must have prior experience of using broadly compliant rating systems, must take measures and restore compliance if requirements cease to be met, may revert to less sophisticated approaches only under the stated conditions, and may permanently use the standardised approach for listed exposures under the partial use rules.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.