Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 83

Calculation of risk-weighted amount of on-balance sheet exposures

An authorized institution shall calculate the risk-weighted amount of each of
its on-balance sheet exposures by—

   (a)  dividing the principal amount of the exposure, net of specific 
        provisions, into—

        (i)    the credit protection covered portion; and

        (ii)   the credit protection uncovered portion;

   (b)  multiplying the credit protection covered portion by the risk-weight
        attributable to the recognized collateral and multiplying the
        credit protection uncovered portion by the risk-weight attributable to
        the exposure; and

   (c)  adding together the 2 products derived from the application of
        paragraph (b).