5 Net Stable Funding Ratio Calculation as Per Capital Requirements Regulation

The Net Stable Funding Ratio (NSFR) is defined as the amount of available stable funding relative to the amount of required stable funding. This ratio is equal to at least 100% on an ongoing basis. Available stable funding is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of such stable funding required (Required stable funding) of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures.

The NSFR aims to ensure that a firm has an acceptable amount of stable funding to support its assets and activities over the medium or long term (over one year).

Figure 4-1 NSFR