Subject matter

5. These guidelines specify the requirements for the estimation of loss given default (LGD) appropriate for an economic downturn in accordance with Part Three, Title II, Chapter 3, Section 6 of Regulation (EU) No 575/2013, Article 181 of that Regulation and the EBA final draft regulatory technical standards on the IRB assessment methodology EBA/RTS/2016/03 [RTS on IRB assessment methodology] of 21 July 2016 as well as EBA final draft regulatory standards on the specification of an economic downturn EBA/RTS/2018/04 [RTS on economic downturn] of 16 November 2018. These guidelines should be considered as an amendment of EBA on PD estimation, LGD estimation and the treatment of defaulted exposures EBA/GL/2017/16 [EBA GL on PD and LGD] published on 20 November 2017.

Scope of application