18.The Central Bank’s standards for capital adequacy include mappings that identify risk weights for various types of exposures using a scale that corresponds most closely to the rating system used by Standard & Poor’s. This is done for purposes of exposition and for consistency with the BCBS framework. However, banks should not interpret use of this scale as a Central Bank endorsement of any particular rating agency. Banks may select among all eligible rating agencies as appropriate for purposes of determining risk weights.

19.On the basis of information assessed by the Central Bank, the following entities currently meet the criteria for eligible ECAIs described in this Guidance:

1. (i)Standard & Poor’s Ratings Services;
2. (ii)Moody’s Investors Service;
3. (iii)Fitch Ratings; and
4. (iv)Capital Intelligence.

20.The Central Bank has concluded that banks can use the ratings of any of the above ECAIs. Banks should be aware that the Central Bank regularly reassesses the extent to which any ECAI meets the criteria stated in this Guidance. Banks must take steps to confirm that any ratings used in capital adequacy calculations are obtained from ECAIs that continue to be viewed as eligible by the Central Bank. Additional entities may be approved as eligible ECAIs in due course.

21.Based on available information regarding the rating processes of these ECAIs, the Central Bank has established the correspondence shown in Table 1 between the long-term rating scales of the various ECAIs. However, if a bank determines that a different mapping is more appropriate, the bank should use that alternative mapping, provided the results are at least as conservative as using the mapping below.

Table 1: Long-Term Rating Correspondence

22.For certain aspects of capital adequacy calculations, short-term ratings are used. Based on available information regarding the rating processes of these ECAIs, the Central Bank has established the correspondence shown in Table 2 between the short-term rating scales of the eligible ECAIs. However, as with the long-term ratings, if a bank determines that a different mapping is more appropriate, the bank should use that alternative mapping, provided the results are at least as conservative as using the mapping below.

Table 2: Short-Term Rating Correspondence