The House Financial Services committee has approved legislation to require a top-level study of one controversial aspect of the global Basel III rules which covers credit valuation adjustments (CVAs). The study is designed to determine the extent to which the European Union (EU) plans to take a different approach to CVAs put U.S. banking organizations at undue disadvantage and/or risk. Although limited to a seemingly technical issue, the CVA charge has sweeping impact in the derivatives market. The measure also speaks to growing concerns about the extent to which the global capital standards can in fact be adopted in reasonably uniform fashion in key financial markets.

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