The European Central Bank (ECB) launched a public consultation in June 2023 on its revised Guide to internal models. The revision reflects updates on the legal framework and builds on the ECB’s experience gained over the years in supervising internal models. The revision accounts for climate-related risks, clarifies requirements for common definitions of default, counterparty credit risk, default risk in the trading book and ways to return to standardised approach. GBIC points out in its comments that the proposed concept is fully in line with the common social and political efforts to build a more sustainable economy and gives detailed feedback to the before listed content.
