The document provides an explanation of the standardized approach for calculating capital charges for credit valuation adjustments (CVA) risk under Basel III. It first discusses how counterparty credit risk has become a major concern following the 2008 financial crisis. It then defines CVA risk and explains how the Basel Committee on Banking Supervision responded by introducing a new CVA capital charge to better capture this risk. The document focuses on explaining the standardized approach for determining the CVA capital requirement, including looking at where the standardized formula comes from and what it is intended to measure.