Article 5

Capital Requirements Regulation (CRR) > PART ONE > TITLE I > Article 5
Article 5
Definitions specific to capital requirements for credit risk
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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.