1. 1. The variance of the loss distribution of type 1 exposures as referred to in paragraph 4 of Article 200 shall be equal to the sum of V interV_{inter} and V intra .V_{intra}.
2. V2. interV_{inter} shall be equal to the following:
V_{\mathrm{inter}} = \sum_{(j,k)} \frac{\mathrm{PD}_{\mathrm{k}} \cdot (1 - \mathrm{PD}_{\mathrm{k}}) \cdot \mathrm{PD}_{\mathrm{j}} \cdot (1 - \mathrm{PD}_{\mathrm{j}})}{1.25 \cdot (\mathrm{PD}_{\mathrm{k}} + \mathrm{PD}_{\mathrm{j}}) - \mathrm{PD}_{\mathrm{k}} \cdot \mathrm{PD}_{\mathrm{j}}} \cdot \mathrm{TLGD}_{\mathrm{j}} \cdot \mathrm{TLGD}_{\mathrm{k}}
where:
((a))(a) the sum covers all possible combinations (j,k) of different probabilities of default on single name exposures in accordance with Article 199;
((b))(b) TLGD_{j} and TLGD_{k} denoteTLGDjandTLGDkdenote the sum of losses -given- default on type 1 exposures from counterparties bearing a probability of default PDj and PDk respectively.defaultPDjandPDkrespectively.
3. V3. intraV_{intra} shall be equal to the following:
V_{\mathrm{intra}} = \sum_{\mathrm{j}} \frac{1.5 \cdot \mathrm{PD}_{\mathrm{j}} \cdot (1 - \mathrm{PD}_{\mathrm{j}})}{2.5 - \mathrm{PD}_{\mathrm{j}}} \cdot \sum_{\mathrm{PD}_{\mathrm{j}}} \mathrm{LGD}_{\mathrm{i}}^2
where:
((a))(a) the first sum covers all different probabilities of default on single name exposures in accordance with Article 199;
((b))(b) the second sum covers all single name exposures that have a probability of default equal to PD_{j};toPDj;
((c))(c) LGD_{i} denotesLGDidenotes the loss-given-default on the single name exposure i.exposurei.