Economics, Econometrics and Finance
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New Valuation Adjustments Revolutionize Risk Management in Banking Sector

WORLD SCIENTIFIC eBooks
DVA and FVA — Price and Value for Accountants, Regulators and Others

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The article discusses the importance of considering both the default risk of a bank's clients and the bank itself when valuing financial assets. It introduces the concept of Debit Valuation Adjustment (DVA) as a way to account for the bank's own default risk. This adjustment is crucial for accurately assessing the true value of financial instruments.