Risk.net

FVA: the story so far

Timeline 5 FVA
Jonathan Ross

Funding valuation adjustment, or FVA, has been the subject of heated debate among academics, regulators and practitioners alike. One of many contentious concepts covered by the general term XVA, it is intended to ensure banks account properly for the cost of posting collateral on derivatives transactions. But the question of how and whether FVA should be applied, and its practical implications, are still as live now as they were five years ago – applying FVA can make a difference of hundreds of millions of dollars to a bank’s bottom line.

Catch up on the debate by reading Risk.net’s agenda-setting coverage below.