The impact of diversification between default or migration risks in the trading book and other risks in the trading book is not currently well understood. Therefore, for the time being, the impact of diversification between default or migration events and other market variables would not be reflected in the computation of capital for incremental risk. This is consistent with the IRB Framework, which does not allow for the benefit of diversification when combining capital requirements for credit risk and market risk. Accordingly, the capital charge for incremental default and migration losses is added to the VaR-based capital charge for market risk.