Money
Net Stable Funding Ratio (NSFR)
154 views
The net stable funding ratio (NSFR) is a long-term liquidity standard under Basel III. It ensures that banks maintain enough stable funding sources to support their long-term assets and activities.
The NSFR measures the ratio of available stable funding to required stable funding. The formula is: NSFR = (Available Stable Funding / Required Stable Funding) and must be at least 100%.
An NSFR of 100% or higher means the bank has sufficient long-term, stable funding sources to cover its long-term assets and operations — reducing the risk of future funding problems.
In Bangladesh, Bangladesh Bank has set NSFR standards for banks following the Basel III guidelines.