NSFR
BankingDefinition
Net Stable Funding Ratio. Bank's available stable funding (long-term deposits + capital) divided by required stable funding (long-term assets). Minimum 100%.
Ensures banks aren't funding 30-year mortgages with overnight money. Reduces structural maturity-transformation risk. Not a substitute for LCR (which focuses on 30-day liquidity); the two together cover both short and long horizons.
Ensures banks aren't funding 30-year mortgages with overnight money. Reduces structural maturity-transformation risk. Not a substitute for LCR (which focuses on 30-day liquidity); the two together cover both short and long horizons.