how do you calculate exposure at default 
there are two main approaches to calculating exposure at default the foundation approach and the advanced approach the foundation approach is guided by regulators and is calculated by considering the asset forward valuation and commitments details the foundation approach does not consider the value of any guarantees collateral or security the advanced approach lets banks determine how ead is calculated based on each individual exposure these types of calculations may vary across loan types or borrower characteristics as the lender is able to assess value as it sees fit 