Valuation adjustments (CVA, DVA, FVA, MVA, KVA (the XVAs), have been subject to constant refinement as regulation has evolved and institutions have understood more about the complexity of derivative valuations. Legal data management is key to the evolution of that understanding and the proper use of contract data in order to make those valuations more accurately and to price more efficiently. Such management includes:
- Use of trade information to legal agreement linkage mapping
- Trade confirmation management
- Recording and tracking of key contract data terms
- We helped a Tier 1 investment bank with a key bank wide project to design and implement an automated data extraction tool to enable it to extract and store key data from master trading agreements. This data was then made available to key consumers including its CVA desk to access far more accurate and granular detail in respect of key provisions and collateral types and to price risk far more accurately.