2.Institutions shall determine the components Adjustmentlong and Adjustmentshort referred to in Article 325w(1) and (2) of Regulation (EU) No 575/2013 by use of the following formulae:AdjustmentlongVFAdjustmentshortVFwhere:VFthe market value of the instrument from which the exposure arises for the institution, calculated under the assumption that at the time of the calculation of the gross JTD amount for that exposure, the debt instrument defaulted and experienced a zero recovery rate.