81. For the purposes of paragraphs 79 and 80 institutions should calculate the observed average …

For the purposes of paragraphs 79 and 80 institutions should calculate the observed average default rates as the arithmetic average of all one year default rates calculated in accordance with paragraphs 73 to 76. In the case of PD models for retail exposure class institutions may calculate the observed average default rate as a weighted average of one-year default rates where an institution does not give equal importance to historic data because more recent data is a better predictor of losses in accordance with Article 180(2)(e) of Regulation (EU) No 575/2013.

5.3.4 Long-run average default rate

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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