(a)

the institution assesses LGD by homogenous facility grade or pool;

(b)

the average realized LGD by facility grade or pool is calculated using the number of default weighted average;

(c)

all observed defaults within the data sources are used, in particular that the incomplete recovery processes are taken into account in a conservative manner for the purposes of LGD estimation, and that the choice of workout period and methodologies for estimating additional costs and recoveries after and, where necessary, during that period, are relevant;

(d)

the LGD estimates of secured exposures are not solely based on the estimated market value of the collateral and that they take into account the realised revenues from past liquidations and the potential inability of an institution to gain control of the collateral and liquidate it;

(e)

the LGD estimates of secured exposures take into account the potential decreases in collateral value from the point of time of LGD estimation to the eventual recovery;

(f)

the degree of dependence between the risk of the obligor and that of the collateral as well as the cost of liquidating the collateral are taken into account conservatively;

(g)

any unpaid late fees that have been capitalised in the institution’s income statement before the default are added to the institution’s measure of exposure and loss;

(h)

the possibility of future drawings after the default is taken into account appropriately;

(i)

all of the following aspects are appropriate for the type of exposures to which they are applied: