1. iii)c)
Widening of credit spread.
While considering the impact on available capital, we have considered the reduction in BEL due to increased matching adjustment.
Just want to clarify few items practically on MA (Matching Adjustment).
It is defined as spread on portfolio of matching assets less fundamental spread published by EIOA.
Widening of credit spread.
While considering the impact on available capital, we have considered the reduction in BEL due to increased matching adjustment.
Just want to clarify few items practically on MA (Matching Adjustment).
It is defined as spread on portfolio of matching assets less fundamental spread published by EIOA.
- Here, MA increases as the spread on matching assets is higher, right?
- Practically, would it mean that MA is adjusted whenever spread is affected? As MA is based on matching assets which are held till maturity, why would the spread affect the MA rate?