(23)The LGD estimation is based on the average realised LGDs weighted by the number of defaults. If the exposure value is a relevant risk driver, it should be considered among other potential risk drivers for the segregation or risk differentiation of LGD in order to ensure that the parameter is calculated for homogenous pools or facility grades. Competent authorities should verify that this approach is adequately applied, as it ensures consistency with the calculation of the PD parameter and a meaningful application of the risk weight formula. Regulation (EU) No 575/2013 distinguishes the method of estimating LGD for individual exposures for the purpose of risk-weighted exposure amounts from the average of LGD estimates calculated at the portfolio level. Differently from the individual LGD estimation, the LGD floor for retail exposures secured by immovable property, applied at the overall portfolio level, is defined as an exposure-weighted average LGD. In order to ensure adequate levels of risk parameters for exposures secured by immovable property competent authorities should verify that the LGD floors are applied correctly.