Search within this legal act

Article 5 - Definitions specific to capital requirements for credit risk

Article 5

Definitions specific to capital requirements for credit risk

For the purposes of Part Three, Title II, the following definitions shall apply:

(1) 

exposure’ means an asset or off-balance sheet item;

(2) 

loss’ means economic loss, including material discount effects, and material direct and indirect costs associated with collecting on the instrument;

(3) 

expected loss’ or ‘EL’ means the ratio of the amount expected to be lost on an exposure from a potential default of a counterparty or dilution over a one-year period to the amount outstanding at default.

In force

Version from: 08/07/2022

Amendment History