A Basel III ratio comparing available stable funding with the funding required over a one-year horizon. It limits reliance on short-term funding for long-term assets.
Where you will meet it
Net stable funding ratio comes up in 7 learning outcome notes across the FRM syllabus.
A few of them:
Banks FRM Part I · Financial markets and products
“Two liquidity standards were added as well, a 30-day liquidity coverage ratio and a net stable funding ratio, both with a 100% minimum.”
The Governance of Risk Management FRM Part I · Foundations of risk management
“Basel III raised the quality and quantity of capital and added a leverage ratio, the liquidity coverage ratio and the net stable funding ratio.”
Liquidity Risk FRM Part II · Liquidity and treasury risk measurement and management
“The Net Stable Funding Ratio compares available stable funding with required stable funding over one year, also at least 100 percent, and it limits reliance on short-term wholesale funding.”
Solvency, Liquidity, and Other Regulation After the Global Financial Crisis FRM Part II · Operational risk and resilience
“The net stable funding ratio (NSFR) compares available stable funding with required stable funding over one year, with a weight on each liability and asset.”
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