Banks that meet the requirements for the estimation of PD will use the same formula for the derivation of risk weights that is used for other SL exposures, except that they will apply the following asset correlation formula:

Correlation (R) = 0.12 x (1 - EXP(-50 × PD)) / (1 - EXP(-50)) + 0.30 x [1 - (1 - EXP(-50 × PD)) / (1 - EXP(-50))]