For pool exposures of type C which the undertaking considers as separate single name exposures in accordance with Article 190(2), the loss-given-default shall be calculated as follows:
\mathrm{LGD} = \max (((1 - \mathrm{RR}_{\mathrm{CE}}) \cdot (\mathrm{P}_{\mathrm{U}} \cdot \mathrm{BE}_{\mathrm{CE}} + \Delta\mathrm{RM}_{\mathrm{CE}}) - \mathrm{F} \cdot \mathrm{Collateral}) ;0)
where:
((i))10 % if 60 % or more of the assets of the external counterparty are subject to collateral arrangements;
((ii))50 % otherwise;
(a)((a)) P_{U} denotes the undertaking's share of the risk according to the terms of the pooling arrangement;
(b)((b)) RR_{CE} is equal to:
(i)((i)) 10 % if 60 % or more of the assets of the external counterparty are subject to collateral arrangements;
(ii)((ii)) 50 % otherwise;
(c)((c)) BE_{CE} denotes the best estimate of the liability ceded to the external counterparty by the pooling arrangement as a whole;
(d)((d)) ΔRM_{CE} denotes the external counterparty's contribution to the risk-mitigating effect of the pooling arrangement on the underwriting risk of the undertaking;
(e)((e)) Collateral denotes the risk-adjusted value of collateral held by the counterparty member of the pooling arrangement;
(f)((f)) F denotes the factor to take into account the economic effect of the collateral held by the counterparty member, calculated in accordance with Article 197.