Asian values – Aaron Woolner column
Asia regulators are sounding the alarm about the relevance of Basel III to their unique, sometimes idiosyncratic, markets
At first glance trade finance, liquidity risk management and credit valuation adjustment (CVA) appear to have little in common but all three are unhappy members of a group of measures in the latest version of the Basel accord which don’t fit the Asian banking landscape. The many moving parts of CVA make it a complex beast but the short explanation of the issue is that with non-existent, or deeply illiquid, credit default swap markets, it is either impossible or pointless to hedge out the credit
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