NSFR is used to determine how much “available” funding there is for a bank, and how much funding is “required” over the long term. A bank must run an NSFR of above 100% at all times, to indicate that it has a long term stable structural funding position in place. A bank that reports a level below 100% must take steps to either increase its ASF, reduce its RSF, or both.
Key learning objectives:
What is NSFR, and what are its aims?
What is the NSFR metric, and what does it tell us?
Define ASF and RSF