Introducing the XVA desk - a treasurer's nightmare

Disparate – but intimately related – adjustments to derivatives prices are being put under one umbrella by some dealers, uniting counterparty risk, funding, collateral and capital management in one super-desk. That frightens some treasurers, who see it as a power grab. Laurie Carver reports

Working out how to organise the management of what some banks call the XVAs may initially seem an innocuous issue. The term groups together the pricing adjustments that have grown in number and importance since the financial crisis – the best-known being credit, debit and funding valuation adjustment (CVA, DVA and FVA) – and because these values overlap, some banks are grouping them organisationally as well, giving pricing and hedging responsibility to a single desk. Barclays and JP Morgan are