Banks will not use NSFR to judge funding risk

Calibration of ratio looks “somewhat insane” when applied to real world, conference hears

jars of money - saving - Getty.jpg
NSFR calculations may look less accurate over time as banking business models change

Bankers say they have little intention of using new rules governing structural liquidity as a framework for judging their economic risks internally, because the calibration is too poor to be helpful. The Basel net stable funding ratio (NSFR) was supposed to enter into force this year, but neither the European Union nor the US have completed their national drafting of the regulation.

“I wouldn’t personally look at NSFR to judge the funding structure of any bank,” said Damian Harland, global head

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