What is Net Stable Funding Ratio (NSFR)?

In this video, Professor Moorad Choudhry explains the Net Stable Funding Ratio (NSFR) — a key regulatory metric introduced under the Basel III framework to measure the long-term structural funding position of a bank’s balance sheet. He outlines how the ratio is calculated, breaking down Available Stable Funding (ASF) and Required Stable Funding (RSF), and explains what it means for a bank’s liquidity, balance sheet structure, and funding strategy. Professor Choudhry also discusses the regulatory minimum requirement of 100%, why maintaining a stable funding base matters for financial stability, and how banks can use the NSFR alongside other internal balance sheet metrics to manage long-term funding risk effectively. This video provides a clear and practical overview of one of Basel III’s most important liquidity measures, essential for anyone studying or working in banking and treasury management. 🔔 Subscribe for more content on banking, risk management, and financial regulation. Recommended Reading: The Principles of Banking (2nd Edition) 📘 https://amzn.to/3l224LE Wikipedia: https://en.wikipedia.org/wiki/The_Pri...