Basel III’s Net Stable Funding Ratio (NSFR) was described in a previous blog. This piece identifies some of the undesirable impacts of the proposal. Unsecured versus secured funding One of most notable features of the NSFR is that unsecured and secured funding sources are given the same ASF factors. In the case of interbank funding…
Tag: NSFR
An introduction to the NSFR for repo dealers in a rush
The NSFR is a key Basel III reform to promote a more resilient banking sector by limiting over-reliance on short-term wholesale funding. It is designed to complement the Liquidity Coverage Ratio (LCR) but, whereas the LCR focuses on cashflow behaviour under market-wide liquidity stresses over 30 days, the NSFR looks at the resilience of the…
An introduction to the Basel III Net Stable Funding Requirement (NSFR) for insomniacs or obsessives in the repo market
The NSFR measures a bank’s Available Stable Funding (ASF) relative to its Required Stable Funding (RSF). Banks will have to maintain their NSFRs at 100% or more. NSFR= ASF/RSF The NSFR is one of the key Basel III reforms to promote a more resilient banking sector through structural changes in the liquidity risk profiles of…