Exposures to public sector entities for which a credit assessment by a nominated ECAI is not available shall be assigned a risk weight in accordance with the credit quality step to which exposures to the central government of the jurisdiction in which the public sector entity is incorporated are assigned in accordance with the following Table 2:

For exposures to public sector entities incorporated in countries where the central government is unrated, the risk weight shall be 100 %.

Exposures to public sector entities for which a credit assessment by a nominated ECAI is available shall be treated in accordance with Article 120. The preferential treatment for short-term exposures specified in Articles 119(2) and 120(2), shall not be applied to those entities.

For exposures to public sector entities with an original maturity of three months or less, the risk weight shall be 20 %.

In exceptional circumstances, exposures to public-sector entities may be treated as exposures to the central government, regional government or local authority F1of the United Kingdom where in the opinion of the competent authorities F2of the United Kingdom there is no difference in risk between such exposures because of the existence of an appropriate guarantee by the central government, regional government or local authority.

When competent authorities of a third country jurisdiction, which apply supervisory and regulatory arrangements at least equivalent to those applied in the F3United Kingdom, treat exposures to public sector entities in accordance with paragraph 1 or 2, institutions may risk weight exposures to such public sector entities in the same manner. Otherwise the institutions shall apply a risk weight of 100 %.

For the purposes of this paragraph, F4the Treasury may by regulations determine whether a third country applies supervisory and regulatory arrangements at least equivalent to those applied in the F5United Kingdom. F6...