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Article 2 - Assessment at factor level and risk weight assignment

Article 2

Assessment at factor level and risk weight assignment

1.   Institutions shall, on the basis of an overall assessment, attribute a category to each factor set out in the annex which is applicable to the class of specialised lending exposures in accordance with Article 1. For each specialised lending exposure, the institution shall carry out this attribution taking into consideration the categories attributed to each applicable sub-factor in accordance with Articles 3 and 4, as well as the relative importance of each sub-factor for the type of specialised lending exposures as defined in point (2) of Article 142(1) of Regulation (EU) No 575/2013.

2.   The institution shall assign a weight in percentage that is not lower than 5 % and not higher than 60 % to each factor having regard to its relative importance for the type of specialised lending exposures.

3.   The institution shall determine the weighted average of the categories, which have been attributed to the factors in accordance with paragraph 1, applying the weights assigned in accordance with paragraph 2. Where the weighted average is a decimal number, institutions shall round that number to the nearest cardinal number.

4.   The institution shall assign the specialised lending exposure to the category set out in Table 1 of Article 153(5) of Regulation (EU) No 575/2013 for which the number corresponds to the weighted average calculated in accordance with paragraph 3.