1. The risk-weighted exposure amounts for retail exposures shall be calculated in accordance with the following formulae:
Risk - weighted exposure amount = RW · exposure value
where the risk weight RW is defined as follows:
(i) if PD = 1, i.e., for defaulted exposures, RW shall be
RW = max {0,12:5 · (LGD - ELBE)
where ELBE shall be the institution's best estimate of expected loss for the defaulted exposure in accordance with Article 181(1)(h);
(ii) if 0 < PD < 1, i.e., for any possible value for PD other than under (i)
2. The risk-weighted exposure amount for each exposure to an SME as referred to in Article 147(5) which meets the requirements set out in Articles 202 and 217 may be calculated in accordance with Article 153(3).
3. For retail exposures secured by immovable property collateral a coefficient of correlation R of 0,15 shall replace the figure produced by the correlation formula in paragraph 1.
4. For qualifying revolving retail exposures in accordance with points (a
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