FVA: How six smaller banks do it

Big dealers do not have a monopoly on funding valuation adjustment (FVA) – regional banks are now pricing, and in some cases accounting for it

FVA: basic blueprint is the same, but details vary

Danske Bank, ING and an unnamed North American regional bank – the first prices funding valuation adjustment (FVA) into its trades and is considering an accounting charge; the second prices it but has ruled out recognising it in accounts; the third took a multi-million dollar loss last year to switch to the new valuations.

Each of these three banks has its own view on whether and how FVA should be applied, is moving at its own pace, and has its own challenges to confront.

In the case of Danske