Having trouble with understanding the logic of FVA. Let's assume that as a trader I trade with a client an uncollateralised fx forward. Then, I hedge my position with "risk-free" bank with which I have a signed CSA.
Having EE profile for the trade I calculate FVA and get some value. What is the meaning for this value? The future value of the trade may be much more or less than FVA. How does this value hedge funding risk?
Why should I calculate FVA for the client's portfolio (e.g. incremental FVA)? It seems more logical to calculate FVA for the "risk-free" bank as funding risk comes from CSA agreement.
Any help is highly appreciated. Thanks.