There are four steps to the CRM Calculation, whether at direct or look-through level:

STEP 1 | Calculate the Credit Risk |
STEP 2 | Map the Credit Risk to the unadjusted Credit Quality Step (CQS) |
STEP 3 | Calculate the adjusted Credit Quality Step (CQS) to reflect the maturity or the recommended holding period. |
STEP 4 | Convert the adjusted Credit Quality Steps to the CRM |
The method for calculating the MRM is set out in Delegated regulation 2017/653 at Annex II, Part 2.