Funding flap: dealers slam NSFR impact on derivatives

Banks fume over “extremely punitive” funding costs from liquidity rule

nsfr-impact
Hard hitting: NSFR's asymmetric treatment of derivatives has come under fire from the industry

Funding derivatives is about to become more expensive – as much as $500 billion more, according to some estimates.

The culprit is the net stable funding ratio (NSFR), the second of the Basel Committee on Banking Supervision's two liquidity requirements. The NSFR is supposed to push banks to shun risky, short-term borrowing in favour of steadier, longer-term financing of assets.

However, its asymmetric treatment of derivatives has come under fire from the industry, which claims it will force

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