\max \{0, \mathrm{E} - \mathrm{G}_{\mathrm{A}} \} \cdot \mathrm{r} + \mathrm{G}_{\mathrm{A}} \cdot \mathrm{g}
1.For the purposes of Article 113(3)113(3), institutions shall calculate the risk-weighted exposure amounts for exposures with unfunded credit protection to which those institutions apply the Standardised Approach, irrespective of the treatment of comparable direct exposure to the protection provider, in accordance with the following formula:
max {0, E – GA} · r + GA · g
where:
E | = the exposure value calculated in accordance with Article 111; for thisthat purpose, the exposure value of an off-balance sheetoff-balance-sheet item listed in Annex I shall be 100 % of its value rather than the exposure value indicated in Article 111(1);111(2);
G_{A} | = the amount of credit protection adjusted for foreign exchange risk protection(G*) as calculated under Article 233(3) (G*) further adjusted for any maturity mismatch as laid down in Section 5;5 of this Chapter;
r | = the risk weight of exposures to the obligor as specified underin Chapter 2;
g | = the risk weight ofapplicable exposuresto a direct exposure to the protection provider as specified underin Chapter 2.
2.Where the protected amount (GA) is less than the exposure (E), institutions may apply the formula specified in paragraph 1 only where the protected and unprotected parts of the exposure are of equal seniority.
3.Institutions may extend the preferential treatment set out in Article 114(4) and (7)(7), to exposures or parts of exposures guaranteed by the central government or the central bank as if those exposures were direct exposures to the central government or the central bank, whereprovided that the guaranteeconditions isset denominatedout in theArticle domestic114(4) currencyor of(7), theas borrowerapplicable, andare themet exposurefor issuch fundeddirect in that currency.exposures.