Loss given default (LGD) - Financial definition
Financial acronyms
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Concise definition of the term loss given default
Loss given default is the loss incurred by a lender if the borrower defaults, expressed as a percentage of the loan amount. Definition is the amount of loss incurred by a lender when a borrower defaults, expressed in percentage.
Comprehensive definition of the term loss given default
LGD is a common parameter in risk models as well as a parameter used in the calculation of economic capital, expected loss or regulatory capital under Basel II for financial institutions.