Net Stable Funding Ratio and Provision: Difference between pages

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imported>Doug Williamson
(Classify page.)
 
imported>Doug Williamson
(Update for FRS 102)
 
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''Bank regulation - funding risk''.
1.


(NSFR).
''Accounting''.  


A longer-term funding measure under Basel III regulations.
A form of liability where there is uncertainty as to the amount and timing of final settlement.


The NSFR requires longer-term and less liquid bank assets to be funded by longer-term, more stable liabilities, assuming a stressed scenario.


Relevant accounting standards include Section 21 of FRS 102.


Although subject to domestic definitions and detailed calculations and weightings, the broad objective is to ensure that a bank is not financing loans and other credit transactions with unstable short term funding, as occurred pre-2008 when many banks were funding long term loans with short term interbank funding.


2.


The NSFR is defined as the ratio of Available Stable Funding (ASF) to Required Stable Funding (RSF):
''Law''.


NSFR = ASF / RSF
A significant individual part of a law, for example a Section in an Act of Parliament.




A ratio of 100% or greater means that the bank has enough stable funding available, to meet its requirements under this measure.
3.


''Contract law''.


The ratio is intended to ensure a bank remains liquid for up to one year during a crisis.  
A significant individual part of a contract, for example a clause or a term in a contract.




== See also ==
== See also ==
* [[Available Stable Funding]]
* [[Accrual]]
* [[Basel III]]
* [[Bad debt provision]]
* [[Liquidity]]
* [[Book reserve]]
* [[Liquidity Coverage Ratio]]
* [[FRS 102]]
* [[Leverage Ratio]]
* [[General provision]]
* [[Loan to deposit ratio]]
* [[Liabilities]]
* [[Funding]]
* [[Term]]
* [[Funding ratio]]
* [[Funding risk]]
* [[Required Stable Funding]]
* [[Stress]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]

Revision as of 11:31, 6 November 2015

1.

Accounting.

A form of liability where there is uncertainty as to the amount and timing of final settlement.


Relevant accounting standards include Section 21 of FRS 102.


2.

Law.

A significant individual part of a law, for example a Section in an Act of Parliament.


3.

Contract law.

A significant individual part of a contract, for example a clause or a term in a contract.


See also

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