After the third consultation paper the Basel Committee recalibrated the risk weightings for claims under the IRB Approach and, in doing so, followed the 'unexpected losses' (UL) concept, i.e. regulatory capital must be reserved only for unexpected deviations from expected losses (unexpected losses - UL).
After the third consultation paper the Basel Committee recalibrated the risk weightings for claims under the IRB Approach and, in doing so, followed the 'unexpected losses' (UL) concept, i.e. regulatory capital must be reserved only for unexpected deviations from expected losses (unexpected losses - UL).