Hello David, Thank you for the explanation! So I might be wrong here but is this sort of in a sense similar to trying to literally understand the Black-Scholes formula? also, if we view this the other way around, for a firm with high PD, it will be charged with higher capital requirement but then the rho and maturity adjustment will 'mitigate' its charges, so I guess without digging deeper into the Basel's formula, it'd be natural to think that the adjustment is there just because it is, not because it's going to have any impact on the charges? maybe I'll just let this one go for now and understand it in a broader sense? Thanks!