Backlash on the EU CVA exemption continues
The decision by European legislators to exempt EU banks from the CVA capital charge when trading with certain counterparties has infuriated regulators at home and abroad. Nick Sawyer discusses the issue with Duncan Wood
A decision by European legislators in February to allow European Union (EU) banks to ignore a credit valuation adjustment (CVA) capital charge under Basel III when trading with corporates, sovereigns and pension fund has drawn a furious response from regulators outside the EU.
They claim their banks will be put at a competitive disadvantage, and bemoan the unlevel playing field this creates – and some jurisdictions are planning changes to how they apply the CVA charge in response.
However, it's
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