The Current State of XVA Usage in Latin America

XVAs are increasingly becoming more engrained in derivatives practices across the globe. The use of XVAs can span from traditional measures, such as accounting for the cost of counterparty risk (CVA), the risk of one’s own default (DVA), and for achieving a more accurate or competitive price, or the XVAs can be much more complex as an institution considers funding, initial margin or regulatory capital costs.

The bottom line is XVA calculations have a significant impact on profitability and risk management for an enterprise, and it becomes an interesting topic of conversation when you look at the degrees of XVA usage across the world and how much they can differ from region to region.

This whitepaper shares key insights regarding the reality of XVA usage in Latin America today.