Asia corporates unfairly ‘penalised’ by CVA capital charge

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Europe's decision to unilaterally provide a credit valuation adjustment (CVA) exemption for banks in derivatives trades with corporates should be applied in Asia, otherwise firms in the region will be "penalised" with uncompetitive pricing that could spill over into problems with the real economy, according to one senior Asia-based banker.

Hong Kong, Singapore and Australia implemented the CVA aspect of the Basel III accord on January 1 this year meaning that banks regulated in those localities

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