Sure this topic must have been discussed in the past.
Tried to price some USD Bermudan swaptions to match the market mid with different models (LGM, G2++, LMM), but all these models seem to over-price quite a bit.
Understood that Bermudans are in general priced at some discount in USD market. But what’s the general discount mechanism? E.g. lower mean reversion speed in LGM? or lower swaption vols? Or playing the switch ratio? Or some magic discount formulas?
Thank you all!