Is stochastic cross-currency basis a better way to model IM?

Using Monte Carlo model extension for forward IM calculation avoids excessive outputs for MVA

The landscape for non-cleared over-the-counter derivatives transactions has undergone drastic regulatory changes over the past few years. Backing up derivatives transactions with collateral has become a central tenet in counterparty credit risk management, with rules and practices being consolidated on a more formal basis. In March 2017, the exchange of variation margin (VM) was made mandatory, and in September 2022, the last stage of the initial margin (IM) phase-in will finally be rolled out