Foundation IRB Approach definition
Foundation IRB Approach means that, in applying the IRB framework, AIs provide their own estimates of PD and use supervisory estimates of LGD and EAD, and, unless otherwise specified by the HKMA, are not required to take into account the effective maturity of credit facilities.
Foundation IRB Approach means that, where an AI is using the IRB for non-securitization exposures, the AI provides its own estimates of PD and uses supervisory estimates for the other credit risk components of its corporate, sovereign and bank exposures;