Recital 1

(1)According to Article 78(1) and (2) of Directive 2013/36/EU, institutions are required to submit to their competent authorities and to the European Banking Authority (‘EBA’), at least annually, the results of the calculations of risk weighted amounts or own funds requirements of their internal approaches, except for operational risk, for their exposures or positions included in the benchmark portfolios. The benchmark portfolios are specified by the EBA and adopted by the Commission. Those results are subsequently to be used by the competent authorities to monitor the range of risk weighted exposure amounts or own funds requirements for the exposures or transactions in the benchmark portfolios resulting from the internal approaches of those institutions. Competent authorities are also required to assess the quality of those approaches at least annually (‘benchmarking exercise’). According to Article 78(3), second subparagraph of Directive 2013/36/EU the EBA has to produce a report to assist the competent authorities in the assessment of the quality of the internal approaches, based on the results of the calculations submitted by the institutions.