Laura WilesThe PRA has published a discussion paper on a range of potential policy changes to the treatment of residential mortgage exposures under the internal ratings based (IRB) approach to credit risk.
The paper arises from concerns that mid-sized firms might face barriers in developing IRB models for loss given default (LGD) and probability of default (PD) estimation, which might limit their access to the approach and in turn constrain effective competition and firms’ growth capabilities.
The consultation closes on 31 October 2025.