NSFR
Net Stable Funding Ratio
Definition
A Basel III liquidity standard requiring banks to maintain a stable funding profile in relation to their assets and off-balance sheet activities over a one-year time horizon. The NSFR ensures that banks do not rely excessively on short-term wholesale funding and maintain adequate levels of stable funding.
Regulatory Context
Complementing the short-term LCR, the NSFR addresses structural funding mismatches. It was implemented in the EU through CRR2 in June 2021 and requires banks to maintain an NSFR of at least 100%.