US sidetracks bid to end European CVA exemption

Fed’s change to SA-CCR capital renews EU industry calls to preserve carve-out

Like a child at the centre of a custody battle, European banks have become wearily familiar with the squabble among higher powers over a controversial carve-out for capital charges on derivatives trades.

The battleground is credit valuation adjustment. On one side is the European Union, which passed an exemption for CVA capital on trades with non-financial corporations, pension funds and sovereigns in 2013. On the other side is the European Banking Authority, which hopes to sweep away the

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