NSFR questioned by US banks

Author: Edward Price | Published: 22 Aug 2016

The US financial services industry is urging the country’s bank regulators to seriously reconsider the proposed net stable funding ratio (NSFR) rule.

The Basel III reforms introduced proposals for two liquidity requirements, the NSFR and the liquidity coverage ratio (LCR). Both proposals were mindful of how the 2007-8 crisis prominently featured critical problems with the liquidity of US banks. As such, they were designed to counter the risk that disruptions to a bank’s funding might damage its liquidity.    

Bill Nelson, The Clearing HouseIn the US, the LCR must be fully implemented by 2017 and regulators are now turning their attention to the NSFR. In March, a joint notice of a proposed rulemaking for a US NSFR was issued by the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). The industry...