FVA is looking more like a pet than a monster

If banks want to make FVA real - by including it in their accounts - they have some hurdles to clear. Auditors seem to be allowing dealers to walk round them instead

A year ago, Risk invoked Frankenstein’s monster to sum up the challenge facing banks as they tried to make funding valuation adjustment (FVA) a part of their books and records. The industry was convinced it should exist, but with no blueprint to follow, each bank was working alone, using varied components that did not quite add up. The article – The black art of FVA – was one of our most popular of the year, and received a new lease of life in January, when JP Morgan brought the topic to wider