As part of the CVA data collection exercise the EBA has re-opened the question of the exemptions granted in Capital Requirements Regulation (CRR) Article 382(4). The EACT letter stresses that non-financial corporates are not systemically risky and lists the adverse consequences of removing the CVA exemption, i.e. increased liquidity risk for corporates from managing cash collateral; the resultant reduction in risk mitigation by corporates electing not to hedge; and the unsuitability of standardised hedging contracts to match business needs. A copy of the EACT letter can be found here.