About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Markit Combines CVA and Capital Solutions Ahead of Basel III

Subscribe to our newsletter

Markit has combined its credit valuation adjustment (CVA) and regulatory capital solutions on one platform with a view to helping banks reduce the costs and overheads of meeting Basel III capital requirements.

The Markit Analytics CVA & Capital platform integrates the management of CVA and internal model capital, allowing users to meet Basel III regulatory requirements and undercut the cost of multiple systems by using a unified simulation engine to calculate CVA and funding value adjustment, as well as internal model capital for CVA, counterparty credit risk and market risk.

Paul Jones, director at Markit Analytics, explains: “Basel III adds the CVA value at risk measure as a new charge to capitalise mark-to-market losses on CVA. Banks want to calculate CVA, the CVA capital charges and other internal model capital charges in a single system without the need to use and validate conservative approximations. They also have to manage their return on equity alongside their CVA profit and loss so they need the ability to allocate capital back to the individual parts of the business. With many banks looking at total cost of ownership, cost savings can be made by using one platform rather than a number of risk engines to calculate capital charges. Using Markit’s CVA & Capital platform the inputs are the same, there is no major migration effort and one set of data improves the validation of calculations.”

Jones says customers have been asking for an integrated CVA and capital solution to replace in-house or vendor solutions focused purely on either risk or CVA. “Banks expect a vendor to be able to provide both the accuracy required for CVA and the performance required for risk and capital in a single system. Better product coverage makes risk measures more sensitive and risk management easier by avoiding approximations. Basel III was designed to increase capital levels across the financial system, but banks are focussed on risk-weighted assets contributions within their trading book and effective risk analytics systems can help this,” says Jones.

Some Markit customers are already implementing the integrated enterprise solution in readiness for the introduction of Basel III next year. Markit, meantime, continues to build on its 2007 entry into the CVA solutions market with plans to add management of limits, such as credit limits, to the CVA & Capital platform.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Hearing from the Experts: AI Governance Best Practices

9 September 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes The rapid spread of artificial intelligence in the financial industry presents data teams with novel challenges. AI’s ability to harvest and utilize vast amounts of data has raised concerns about the privacy and security of sensitive proprietary data and the ethical...

BLOG

Cautious and Steady Adoption of Unstructured Data Capabilities Advocated by Experts in DMI Webinar

Financial institutions are taking a considered approach to integrating unstructured data into their systems, exercising caution as they get to grips with the mushrooming data format and the technology that is enabling generation of it. At the most recent A-Team Group Data Management Insight webinar, experts and audience members alike attested to the growing importance...

EVENT

TradingTech Summit London

Now in its 14th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...