This chapter of the Capital Adequacy Module describes the IRB approach to credit risk. Subject to certain minimum conditions and disclosure requirements, banks that have received CBB's 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 most cases, banks are required to use a value given by the CBB as opposed to an internal estimate for one or more of the risk components.