NSFR
Net Stable Funding Ratio
Basel III requirement ensuring banks maintain stable funding for their activities over a one-year horizon.
NSFR requires banks' available stable funding to be at least 100% of their required stable funding, promoting longer-term structural liquidity resilience. Available stable funding includes deposits, long-term wholesale funding, and capital, each weighted based on stability. Required stable funding is determined by the liquidity characteristics and maturity of banks' assets and off-balance sheet exposures. NSFR encourages banks to use stable funding sources for longer-term and less liquid assets. The requirement complements LCR by focusing on structural rather than short-term liquidity. NSFR reduces banks' reliance on short-term wholesale funding and promotes more stable funding profiles that can withstand periods of market stress.
Example
Customer deposits and long-term debt as stable funding, loans and securities requiring stable funding