Article 153 Risk-weighted exposure amounts for exposures to corporates, institutions and central governments and central banks

1. Subject to the application of the specific treatments laid down in paragraphs 2, 3 and 4, the risk-weighted exposure amounts for exposures to corporates, institutions and central governments and central banks shall be calculated according to the following formulae:

Risk - weighted exposure amount = RW · exposure value

where the risk weight RW is defined as

(i) if PD = 0, RW shall be 0;

(ii) if PD = 1, i.e., for defaulted exposures:

- where institutions apply the LGD values set out in Article 161(1), RW shall be 0;

- where institutions use own estimates of LGDs, RW shall be RW = max {0,12.5 · (LGD - EL_BE)};

where the expected loss best estimate (hereinafter referred to as 'EL_BE') shall be the institution's best estimate of expected loss for the defaulted exposure in accordance with Article 181(1)(h);

(iii) if 0 < PD < 1

2. For all exposures to large financial sector entities, the co-efficient of correlation of paragraph 1(iii) is multiplied by 1,25. For all exposures to unre

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