Introduction to KVA

Introduction to KVA

Steven Marshall

25 years: Derivatives trading

In this next video within the XVA pathway, Steven Marshall discusses the cost of capital in derivative trades, the KVA. He will first explain the emergence of KVA after Basel III and then discuss how to calculate KVA.

In this next video within the XVA pathway, Steven Marshall discusses the cost of capital in derivative trades, the KVA. He will first explain the emergence of KVA after Basel III and then discuss how to calculate KVA.

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Introduction to KVA

11 mins 2 secs

Overview

Another factor impacting derivative pricing is capital. This has become more prominent in recent years due to the increased capital requirements following the financial crisis. With increased capital requirements on derivative transactions, firms are having to price in this cost of capital in trade prices, this is known as KVA.

Key learning objectives:

  • Understand the background of KVA

  • Outline KVA

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Summary
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Expert
Steven Marshall

Steven Marshall

Steven Marshall has over 25 years of experience in Global Markets and Investment Banking trading both interest and credit derivatives, most recently running the Global Business Resource Management Team at Nomura International. Steven is now the CEO and co-founder of RegRisk Technology where he provides innovative technology solutions to aid with regulatory compliance at financial firms and is currently providing XVA consultancy services via Tensilo Limited.

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