The paper provides guidance on the incremental risk capital charge (“IRC”) modelling approaches employed by credit institutions using the Internal Model Approach for the calculation of the required capital for specific interest risk in the trading book, and is seen as a means of addressing weaknesses in the regulatory capital framework and in the risk management of financial institutions that contributed to the turmoil in global financial markets. The consultation focuses on the positions that are subject to IRC modelling and the permanent partial use of IRC models together with the guidance on use and sources of IRC modelling.