MANAGEMENT

Detailed explanation-1: -The loss given default (LGD) is an important calculation for financial institutions projecting out their expected losses due to borrowers defaulting on loans. The expected loss of a given loan is calculated as the LGD multiplied by both the probability of default and the exposure at default.

Detailed explanation-2: -LGD is the share of an asset that is lost when a borrower defaults. The recovery rate is defined as 1 minus the LGD, the share of an asset that is recovered when a borrower defaults.

Detailed explanation-3: -LGD is calculated as the inverse (1 minus) the anticipated recovery rate on loans secured by specific underlying assets. Recovery rates are a function of the underlying collateral, as well as the loan-to-value against those assets.

Detailed explanation-4: -LGD-Local Government Directory, Government of India.