What is Credit Valuation Adjustment?
In this glossary, Credit Valuation Adjustment refers to: A regulatory adjustment to the fair value of derivative instruments to account for counterparty credit risk, as mandated by Basel III. CVA reflects the market value of counterparty default risk on over-the-counter derivatives.
How is Credit Valuation Adjustment used in finance?
In finance communication, this term appears in contexts such as: "Banks are required to calculate credit valuation adjustment charges for derivative portfolios to reflect counterparty risk as per Basel III."
Why does Credit Valuation Adjustment matter in finance?
Credit Valuation Adjustment matters because it supports clear communication in Banking contexts for Financial Analysts, Bankers, and Traders. It also connects to aviation training and exam language such as CFA, ACCA, and FRM.
Who uses Credit Valuation Adjustment?
Credit Valuation Adjustment is mainly used by Financial Analysts, Bankers, and Traders.
What category does Credit Valuation Adjustment belong to?
In this glossary, Credit Valuation Adjustment is grouped under Banking. Related pages in this category explain adjacent procedures, commands and operational concepts.
Where does this definition come from?
This definition is sourced from CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework and published by Protermify Finance as a static finance reference page.
