The state of the XVA space - MVA, pre-trade challenges and more

Since the financial crisis, counterparties have recognised that having a better understanding of XVAs can help them provide more competitive, timely and accurate derivatives pricing – and understand the risks they and others pose when entering into a derivatives contract.

While the XVA spotlight first shone on credit valuation adjustment (CVA) following the crisis, margin valuation adjustment (MVA) has emerged in recent years in light of the initial margin (IM) rules that continue to spread to increasingly smaller firms.

This white paper examines the state of the XVA space. It explores how market participants are grappling with the conceptual and practical challenges of MVA, which XVAs are most important now, and how cloud-based solutions could be beneficial for XVAs.