At the top of this hierarchy is the Internal Ratings-Based Approach, which banks may use if their supervisors have approved their use of internal models. This is followed by the External Ratings-Based Approach – where credit ratings are permitted to be used in the jurisdiction – and the Standardized Approach.
Additional risk drivers, notably an explicit adjustment to take account of the maturity of a Securitisation’s tranche, have been introduced. 11. Recently, a joint BCBS-IOSCO Task Force on Securitisation Markets (TFSM) undertook a review of securitisation markets in order to identify the factors that may be hindering the development of sustainable securitisation markets.