[341] Supervisors may choose any of the two Approaches - MBA or a PD/LGD Approach - would be used by a Banks to calculate risk-weighted assets for equity exposures not held in the trading book. The PD/LGD Approach is designed to capture risks from credit-related losses only; this approach is more suited for use in cases where credit-related issues are seen as the main focus. The MBA is designed to capture a wide range of risks (e.g., interest rates, general market movements, etc), in addition to credit-related losses.

SAMA proposes that the MBA should be used for determining capital requirements for equity exposures in the banking book.