Net Stable Fund Ratio

From Open Risk Manual
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

Definition

Net Stable Fund Ratio. It is a significant component of the Basel III reforms. It requires financial institutions to maintain a stable funding profile in relation to their on and off-balance sheet activities. In this way, it reduces the likelihood to lose a financial institution's liquidity position in a way that could increase the risk of its failure and potentially leads to broader systemic stress.