On a transitional basis, banks will be allowed to use a combination of the standardised approach and the internal models approach to measure their market risks provided they should cover a complete risk Category (e.g. interest rate risk or foreign exchange risk), i.e. a combination of the two methods will not be allowed within the same risk Category.² However, for banks that are, at present, still implementing or further improving their internal models, they will be allowed some flexibility, even within risk categories, in including all their operations on a worldwide basis. This flexibility shall be subject to the specific prior written approval of the Central Bank, and such approval will be given on a case-by-case basis and reviewed by the Central Bank from time to time.

²This does not, however, apply to pre-processing techniques which are used to simplify the calculation and whose results become subject to the standardised methodology.