DVAs inflate US banks’ liabilities by $4.9bn
Credit spread retrenchment since last year’s crisis comes with flipside of larger structured-product liabilities
The liabilities of Wall Street’s largest dealers widened by $6.8 billion as credit spreads reeled back from last year’s regional banking shock – a fiendishly hard-to-hedge accounting quirk that keeps blemishing their quarterly profits.
Across Bank of America, Citi, JP Morgan, Goldman Sachs and Morgan Stanley, debt valuation adjustments (DVAs) went from shaving $2 billion off their non-derivatives
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