# Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance), Article 5: Definitions specific to capital requirements for credit risk

Extent: E+W+S+N.I.

For the purposes of Part Three, Title II and Articles 132a to 132c of Chapter 3 of the Standardised Approach and Internal Ratings Based Approach to Credit Risk (CRR) Part of the PRA Rulebook, 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.

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Source: https://www.legislation.gov.uk/eur/2013/575/article/5 (the official version)
Page: https://openlegislation.uk/eu-regulation-2013-575/article-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.