Targeted Review of Internal Models

From Open Risk Manual


Targeted Review of Internal Models (TRIM) denotes a broad exercise performed by European Banking regulators[1] aimed at enhancing the credibility and confirming the adequacy and appropriateness of approved Pillar I internal models permitted for use by significant institutions when calculating own funds requirements

TRIM Components

Establish Compliance with regulatory requirements related to internal models, through an assessment based on the

  • Capital Requirements Regulation (CRR)
  • the Capital Requirements Directive (CRD IV)
  • relevant Commission Delegated Regulations and Commission Implementing Regulations
  • regulatory technical standards (RTS)
  • European Banking Authority (EBA) guidelines, and
  • the approved European Central Bank (ECB) Banking Supervision manuals and guidelines

Reduction of unwarranted variability in RWA as it relates to internal model outcomes, taking into account

  • the results of benchmarking
  • delivering interpretations of the CRR and
  • addressing current gaps in interpretation of regulations relating to internal models, in situations where significant modelling issues contributing to unwarranted variability have been identified.


  1. ECB guide to internal models − Credit risk, Sep 2018

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