Recital 1

(1)The application of the advanced method to the determination of own funds requirements for Credit Valuation Adjustment (CVA) risk may involve counterparties for which no Credit Default Swap (CDS) spread is available. Where this is the case, institutions should use a spread that is appropriate having regard to the rating, industry and region of the counterparty (proxy spread) in accordance with the third subparagraph of Article 383(1) of Regulation (EU) No 575/2013.