Telephone: +44 (0)20 7920 9128
Email: info@barbicanconsulting.co.uk
Web: www.barbicanconsulting.co.uk
Net stable funding ratio
Published: 25th March 2017 by William Webster
The NSFR requires banks to maintain stable levels of funding relative to their assets and off-balance sheet liabilities. It is a structural ratio designed to improve both bank and systemic resilience. It is a check on rapid bank balance sheet growth and it discourages banks from holding long term illiquid assets funded through wholesale sources.
It is one of two minimum standards (the other being the Liquidity Coverage Ratio which focusses on holding short term high quality assets to meet short term liquidity shocks). To back this up there are a host of liquidity monitoring tools they impose on banks via regulatory reporting.
Register for free or login to view the full publication
Related Documents
Basel III 
12th August 2011
Basel III is about tightening up the capital and liquidity requirements for financial institutions. Whilst regulators and politicians want to avoid further bails outs there is a danger that the new rules could add further disruption to the credit system. It therefore follows that the new legislation will take at least a decade to be applied and in the process it will be subject to alteration. To be clear bank regulation is very much in the "melting pot". For many firms Basel III will increase the costs of doing business. Banks that find ways to change what they do or the way they do it will use their capital more effectively (aka leverage). This quick guide considers tiers 1, 2 and 3, the credit value adjustment, the liquidity coverage ratio, the net stable funding ratio and the possible effect on firms.
Net interest income and low rates 
25th March 2017
You may have noticed that bank earnings are sensitive to interest rates. As rates fall the net interest income (NII) they earn falls too. Why is this?
Regulation > Consultation Paper 08/22 Strengthening liquidity standards December 2008
31st January 2009
This CP sets out the FSA's plans to reform the liquidity regime. It requires firms to undertake a much more rigorous analysis of their liquidity position. This includes the effect of stressed conditions on their business. The firm will submit what it considers to be an appropriate liquidity buffer to the regulator. The FSA will then decide whether it is sufficient. In determining the buffer the FSA will also assess the firm's systems and management. If these are considered weak the buffer will be increased accordingly. The liquidity buffer can only be held in liquid assets. The FSA's view is that this primarily means Gilts, sovereign debt or central bank deposits. The FSA makes it clear, "The responsibility of adopting a sound approach to liquidity risk management is on firms and their senior management".
Funding For Lending
25th July 2012
The following explanation is about The Funding for Lending Scheme. It contains the main content of the The Bank of England's Explanatory Note of 13th July 2012 together with additional comments.
Funding for Lending
Funding policy - quick guide
30th July 2010
Building societies are expected to have an up to date funding policy statement. This will need board approval. What should your funding policy contain? NEDs may find this guide helpful.