Arxo Findings Register · Arxo Law

ARXO-2026-0364 · Reported

Basel Framework: CRE32.10

The LGD* formula divides by E x (1+H_E), which is zero for an undrawn commitment whose exposure arises only through the CCF.

Consequence

Position: Facility with drawn E = 0, undrawn commitment 100, CCF 40%, collateral 50. Reading a: E = 0: weights undefined. Reading b: E taken as EAD 40: LGD* defined. Difference: Undefined vs defined (not executed)

Proposed correction

Clarify or correct the cited passage so that the rule and its references give one result for the stated case.

Issued by
Basel Committee on Banking Supervision
Act
Basel Framework CRE32 (in force 2028-11-01, published 2025-10-28)
Place
CRE32.10
Record
Discrepancy
Class
Text of the act
Where it arose
The text of the act
Arxo's conclusion
Confirmed
Official text
Unchanged at last check
Last checked
2026-10-31

Evidence

Contradiction within the text. Quotations are verbatim from the official material; translations are ours and marked.

The LGD applicable to a collateralised transaction (LGD*) must be calculated as the exposure weighted average of the LGD applicable to the unsecured part of an exposure (LGD_{U}) and the LGD applicable to the collateralised part of an exposure (LGD_{S}).
Normative text · Basel Framework CRE32 (in force 2028-11-01, published 2025-10-28) · CRE32.10 · Published 2025-10-28 · retrieved 2026-10-31 · SHA-256 1e1051609aa106ca364a92ee01b845b3e06a570b48298b2cc019b5607be72ce8 · copy
E_{U} = E ∙ (1+H_{E}) - E_{s}.
Normative text · Basel Framework CRE32 (in force 2028-11-01, published 2025-10-28) · CRE32.10 · Published 2025-10-28 · retrieved 2026-10-31 · SHA-256 1e1051609aa106ca364a92ee01b845b3e06a570b48298b2cc019b5607be72ce8 · copy

How to check it without Arxo's tools

  1. Open Basel Framework CRE32 (in force 2028-11-01, published 2025-10-28) and find CRE32.10. Compare the text with the quotation above. A copy is kept in this register: 1e1051609aa106ca-CRE32@2028-11-01~2025-10-28.txt (SHA-256 1e1051609aa106ca364a92ee01b845b3e06a570b48298b2cc019b5607be72ce8, copy of the official file).
  2. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI models read the texts, built the examples and reviewed the findings.

Responsible institutions

Reported to

DateInstitutionChannelReference
2026-10-31Basel Committee on Banking Supervisione-mailhttps://mail.google.com/mail/u/0/#sent/KtbxLthRTjRNkqRtWGvxMWmXhVdckfWkGV

Responses

No response recorded.

History

  1. 2026-10-31Confirmed by Arxo
  2. 2026-10-31Entered in the register
  3. 2026-10-31Reported to Basel Committee on Banking Supervision (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0364, https://arxo.io/findings/ARXO-2026-0364/ (status as of 2026-10-31). Data: ARXO-2026-0364.json.