Asia corporates unfairly ‘penalised’ by CVA capital charge
The move by European authorities to exempt European banks from holding CVA capital should be matched by regulators in Asia, according to senior bankers in the region
Europe's decision to unilaterally provide a credit valuation adjustment (CVA) exemption for banks in derivatives trades with corporates should be applied in Asia, otherwise firms in the region will be "penalised" with uncompetitive pricing which could spill over into problems with the real economy, according to one senior Asia-based banker.
Hong Kong, Singapore and Australia implemented the CVA aspect of the Basel III accord on January 1 this year meaning that banks regulated in those localities
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