Validation rule v09762_m, checks that the LGD (c0070) should be less or equal to 100% in template C 08.03 (CR IRB 3)

According to the formulae v09762_m : {c0070} <= 1 in C08.03 “CR IRB 3”. This control checks that the LGD (c0070) should be less or equal to 100% in C08.03 “CR IRB 3”. However, according to the art.132 - EBA/GL/2017/16 - 20/11/2017 the process of quantifying LGDs, does not allow for the explicit consideration of discounting effects and recovery costs in the calibration. It is normal to obtain LGD levels higher than 100% in the riskiest buckets, taking into account the recovery costs and the discounting effect. So the formulae rule cannot be respected. Could you please therefore cancel this rule? According to the formulae v09762_m : {c0070} <= 1 in C08.03 “CR IRB 3”. This control checks that the LGD (c0070) should be less or equal to 100% in C08.03 “CR IRB 3”. However, according to the art.132 - EBA/GL/2017/16 - 20/11/2017 the process of quantifying LGDs, does not allow for the explicit consideration of discounting effects and recovery costs in the calibration. It is normal to obtain LGD levels higher than 100% in the riskiest buckets, taking into account the recovery costs and the discounting effect. So the formulae rule cannot be respected. Could you please therefore cancel this rule?

The rule v09762_m seems to be not relevant.