Is Your Bank's Funding Stable for a Year?
The NSFR ensures banks have stable funding (ASF) to cover required stable funding (RSF) over a one-year horizon. NSFR ≥ 100% required since 2018. LCR covers 30 days; NSFR covers structure.
Why This Matters for Your Finances
Why: NSFR addresses long-term funding mismatches that LCR does not. Banks must fund long-term assets with stable funding — capital gets 100% ASF, retail deposits 95%, short-term wholesale 0%. Non-compliance triggers regulatory intervention.
How: Enter Total ASF (Available Stable Funding) and Total RSF (Required Stable Funding) in billions. The calculator computes NSFR percentage, compliance status, and shortfall or buffer.
- ●NSFR = (ASF / RSF) × 100% — minimum 100% required since 2018
- ●ASF: capital 100%, stable deposits 95%, term >1Y 50%, short-term 0%
- ●RSF: cash 0%, gov bonds 5%, corporate bonds 20%, loans 65-100%
- ●US large banks average ~115% NSFR; maintain 5-10% buffer above minimum
Examples
⚠️For educational purposes only — not financial advice. Consult a qualified advisor before making decisions.
💡 Money Facts
NSFR ≥ 100% required since January 2018
— BIS
US large banks average ~115% NSFR
— Federal Reserve
LCR covers 30 days; NSFR covers 1 year
— BIS
Capital gets 100% ASF factor; short-term wholesale gets 0%
— OCC
Cash and reserves get 0% RSF factor
— BIS
Commercial loans get 100% RSF factor
— BIS
What is the Net Stable Funding Ratio?
The NSFR is a Basel III liquidity standard ensuring banks maintain stable funding to cover long-term assets. NSFR ≥ 100% is required.
Minimum NSFR Required
Avg US Large Bank NSFR
Basel III NSFR Effective
NSFR Formula
Key Takeaways
- NSFR = (ASF ÷ RSF) × 100%
- Minimum 100% required since 2018
- ASF = weighted stable funding sources
- RSF = weighted asset liquidity requirements
Did You Know?
• US large banks average ~115% NSFR
• LCR covers 30 days; NSFR covers 1 year
• Capital gets 100% ASF factor
• Cash and reserves get 0% RSF factor
• Commercial loans get 100% RSF factor
• Short-term wholesale funding gets 0% ASF
How It Works
ASF Calculation
Funding sources weighted by stability (capital 100%, stable deposits 95%, term >1Y 50%, short-term 0%).
RSF Calculation
Assets weighted by liquidity need (cash 0%, gov bonds 5%, corporate bonds 20%, loans 65–100%).
Compliance
NSFR ≥ 100% means stable funding covers required funding. Regulators monitor and may require buffers.
Expert Tips
Buffer
Maintain 5–10% above 100% for flexibility
Deposits
Retail deposits get higher ASF factors
Assets
Reduce high-RSF assets to improve NSFR
Stress
Run stress tests on funding assumptions
NSFR vs LCR
| Metric | NSFR | LCR |
|---|---|---|
| Horizon | 1 year | 30 days |
| Focus | Structural funding | Stress liquidity |
| Minimum | 100% | 100% |
FAQ
What is NSFR?
The Net Stable Funding Ratio (NSFR) is a Basel III liquidity standard requiring banks to maintain stable funding (ASF) sufficient to cover required stable funding (RSF) over a one-year horizon. NSFR = (ASF / RSF) × 100%, with a minimum requirement of 100%.
How is NSFR calculated?
NSFR = (Available Stable Funding / Required Stable Funding) × 100%. ASF is the sum of funding sources weighted by stability factors (capital 100%, stable deposits 95%, term deposits >1Y 50%, etc.). RSF weights assets by liquidity (cash 0%, gov bonds 5%, loans 65–100%).
What is the difference between NSFR and LCR?
LCR (Liquidity Coverage Ratio) measures 30-day stress survival using high-quality liquid assets. NSFR measures structural funding stability over one year. LCR addresses short-term liquidity; NSFR addresses long-term funding mismatches.
What is the Basel III NSFR requirement?
Basel III requires NSFR ≥ 100% effective January 2018. Banks must maintain available stable funding at least equal to required stable funding. Supervisors may require higher buffers. Non-compliance triggers regulatory intervention.
What are ASF and RSF?
ASF (Available Stable Funding) includes capital, retail deposits, and wholesale funding with maturity >1 year, each weighted by stability. RSF (Required Stable Funding) is the amount of stable funding needed for assets based on their liquidity and encumbrance.
How does NSFR impact banks?
NSFR incentivizes banks to fund long-term assets with stable funding, reducing maturity mismatches. It may increase funding costs, limit certain business models, and push banks toward retail deposits and longer-term wholesale funding.
Key Stats
Minimum NSFR
Avg Large Bank
Effective Year
Formula
Sources
Disclaimer: This calculator is for educational purposes. Consult regulators and professional advisors for compliance.