Corporate CVA exemption should be removed, says EBA
The EBA is proposing to end an exemption to the Basel III CVA charge for trades with corporates, with capital surcharges mooted as a temporary solution
European banks will no longer be protected from Basel III counterparty risk charges on trades with corporate customers, if a new recommendation from the European Banking Authority (EBA) is adopted by the European Commission (EC). That is already worrying corporates, one of which has predicted a five-fold increase in trading costs.
The plans were discussed at a public meeting in London on December 5, which was designed to gather information about the impact of credit valuation adjustment (CVA)
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