US regulators have veered away from Europe – and stuck to the Basel III script – by implementing the new prudential framework with no exemptions to the credit valuation adjustment (CVA) charge for derivatives counterparty risk. The widely expected move means European banks will be able to offer lower prices than their US rivals to corporates, sovereigns and pension funds, which often trade on an uncollateralised basis and may be subject to a relatively high CVA add-on.

"There is a real risk that