Subject to certain minimum conditions and disclosure requirements, banks that have received supervisory approval to use the
IRB approach may rely on their own internal estimates of risk components in determining the capital requirement for a given
exposure. The risk components include measures of the probability of default (PD), loss given default (LGD), the exposure
at default (EAD), and effective maturity (M). In some cases, banks may be required to use a supervisory value as opposed to
an internal estimate for one or more of the risk components.