This chapter considers the management of counterparty risk within an institution and the role of the xVA desk. An xVA desk is responsible for either some or all of the components like counterparty risk, collateral optimization, capital, funding and margin. Such components collectively represent the cost of holding an over‐the‐counter (OTC) derivative transaction to maturity. From a pricing perspective, an xVA desk performs two roles. One is transfer‐pricing role, where xVA pricing is similar to buying insurance. The other role is hurdles, where the xVA desk only sets a hurdle for the trading or sales desk to achieve and there is no actual transfer of profit or risk. Full simulation‐based quantification is a requirement for accurate incremental pricing at the counterparty or portfolio level. It is likely to be a requirement for some/all of the xVA components, specifically: counterparty value adjustment (CVA), debt value adjustment (DVA), funding value adjustment (FVA), margin value adjustment (MVA), and capital value adjustment (KVA).