Smaller Japan banks set to adopt CVA accounting
IFRS convergence levels playing field as regional banks start to price in credit risk
More Japanese banks are planning to report the market value of counterparty credit risk in derivatives trades, in a move that could lead to losses but align swap pricing with domestic and international bank peers, dealers say.
A change to local accounting rules, slated for 2021, will sweep away an exemption that has allowed Japan’s banks to avoid adjusting their books to reflect the fair value of derivatives portfolios. Swerving this credit valuation adjustment, or CVA, has long enabled the
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