what is the difference between ead and lgd 
ead is exposure at default and represents the value of a loan that a bank is at risk of losing at the time a borrower defaults on their loan loss given default is the value of a loan that a bank is at the risk of losing after taking into proceeds from the sale of the asset represented as a percentage of total exposure can loss given default be zero loss given default can theoretically be zero when a financial institution is modeling lgd if the model believes that a full recovery on the loan is possible then the lgd can be zero this is usually not the case however 