This document outlines the framework for institutions to provide their own estimates of Loss Given Default (LGD), subject to specific regulatory requirements. Institutions may apply their own LGD estimates for comparable exposures, provided they have received the requisite permissions from competent authorities, and adhere to established input floor values for retail exposures, as detailed in the accompanying Table 1.

Member States are tasked with designating an authority responsible for the oversight of LGD input floors, ensuring cooperation between relevant national bodies. This authority is also required to assess, at least annually, the appropriateness of these LGD values and may implement higher floors if deemed necessary for maintaining financial stability.