🏦 NSFR Calculator
Calculate Net Stable Funding Ratio (NSFR)
Capital, liabilities, and equity with stable funding characteristics
Required stable funding for assets and activities
How to Use This Calculator
Enter Available Stable Funding
Input the total available stable funding, which includes capital, stable deposits, long-term funding, and other liabilities with stable funding characteristics.
Enter Required Stable Funding
Input the required stable funding, which is calculated based on the stable funding needs of assets and activities, considering their liquidity and maturity profiles.
Review Results
See the NSFR ratio, compliance status (must be ≥ 1.0), and excess or deficit of stable funding.
Formula
NSFR = Available Stable Funding / Required Stable Funding
NSFR must be ≥ 1.0 (100%) to be compliant
Excess/Deficit = Available Stable Funding - Required Stable Funding
Example 1: Compliant Bank
Available Stable Funding: $1,000,000
Required Stable Funding: $800,000
NSFR = $1,000,000 / $800,000 = 1.25
Status: ✅ Compliant (above 1.0)
Excess: $200,000
Example 2: Non-Compliant Bank
Available Stable Funding: $750,000
Required Stable Funding: $800,000
NSFR = $750,000 / $800,000 = 0.938
Status: ❌ Non-Compliant (below 1.0)
Deficit: $50,000
About NSFR Calculator
The NSFR (Net Stable Funding Ratio) Calculator calculates a key liquidity ratio for banks and financial institutions. NSFR is a Basel III regulatory requirement that measures a bank's long-term funding stability by comparing available stable funding to required stable funding. It ensures banks have sufficient stable funding to support their assets and activities over a one-year horizon.
NSFR complements the Liquidity Coverage Ratio (LCR) by focusing on long-term liquidity risk rather than short-term liquidity stress. It encourages banks to fund their activities with stable sources of funding and reduces reliance on short-term wholesale funding. NSFR must be at least 1.0 (100%) to be compliant with regulatory requirements.
This calculator is essential for banks, financial institutions, regulators, risk managers, and anyone studying banking regulation and liquidity risk management. It helps ensure compliance with Basel III requirements and assess long-term funding stability.
When to Use This Calculator
- Banking Compliance: Calculate NSFR to ensure regulatory compliance
- Risk Management: Assess long-term funding stability and liquidity risk
- Regulatory Reporting: Calculate NSFR for regulatory reporting requirements
- Academic Study: Learn about Basel III and banking regulation
- Financial Analysis: Analyze bank liquidity and funding structure
- Policy Evaluation: Evaluate the impact of funding strategies on NSFR
Why Use Our Calculator?
- ✅ Accurate Calculations: Uses standard NSFR formula
- ✅ Compliance Check: Shows whether NSFR meets regulatory minimum
- ✅ Educational: Helps understand NSFR and banking regulation
- ✅ Easy to Use: Simple interface for quick calculations
- ✅ Free Tool: No registration or fees required
- ✅ Detailed Results: Shows excess or deficit of stable funding
Understanding NSFR
NSFR measures the stability of a bank's funding sources relative to the liquidity of its assets and activities. Available Stable Funding includes capital, stable deposits (with high ASF factors), long-term funding, and other stable funding sources. Required Stable Funding is calculated based on assets and activities, with higher RSF factors for less liquid assets and longer-term activities.
NSFR encourages banks to match the maturity of their assets with stable funding sources. It discourages excessive reliance on short-term wholesale funding and promotes more stable, longer-term funding. A ratio of 1.0 or higher indicates that a bank has sufficient stable funding to support its assets and activities.
Real-World Applications
Regulatory Compliance: Banks must calculate and report NSFR regularly to demonstrate compliance with Basel III requirements. NSFR must be at least 1.0, and regulators monitor this ratio to ensure banks maintain adequate stable funding.
Risk Management: Banks use NSFR to assess their long-term funding stability and identify potential liquidity risks. A low NSFR indicates vulnerability to funding stress and may require adjustments to funding strategy or asset allocation.
Strategic Planning: Banks use NSFR calculations to evaluate the impact of business decisions on funding stability. This helps design funding strategies that maintain compliance while optimizing funding costs.
Important Considerations
- NSFR must be at least 1.0 (100%) to be compliant with Basel III
- Available Stable Funding includes capital, stable deposits, and long-term funding
- Required Stable Funding depends on asset liquidity and activity maturity
- NSFR focuses on long-term liquidity risk (one-year horizon)
- Actual NSFR calculations involve detailed ASF and RSF factors for different funding sources and assets
- This calculator provides a simplified version; actual regulatory calculations are more complex
Frequently Asked Questions
What is NSFR?
NSFR (Net Stable Funding Ratio) is a Basel III liquidity ratio that measures a bank's long-term funding stability. It compares available stable funding to required stable funding and must be at least 1.0 (100%) to be compliant.
What is the difference between NSFR and LCR?
LCR (Liquidity Coverage Ratio) focuses on short-term liquidity stress (30 days), while NSFR focuses on long-term funding stability (one year). LCR ensures banks can survive short-term liquidity shocks, while NSFR ensures banks have stable funding for their assets and activities.
What is considered stable funding?
Stable funding includes capital, stable retail deposits, long-term wholesale funding, and other funding sources with stable characteristics. Funding stability is determined by factors such as deposit type, maturity, and depositor characteristics.
What happens if NSFR is below 1.0?
If NSFR is below 1.0, the bank is non-compliant and may face regulatory restrictions or requirements to increase stable funding or reduce required stable funding (by changing asset allocation or activities). Banks must maintain NSFR ≥ 1.0 to comply with Basel III.
How can banks improve their NSFR?
Banks can improve NSFR by: (1) increasing available stable funding (raising capital, attracting stable deposits, issuing long-term debt), (2) reducing required stable funding (holding more liquid assets, reducing long-term activities), or (3) a combination of both.
Is this calculator sufficient for regulatory reporting?
This calculator provides a simplified NSFR calculation. Actual regulatory NSFR calculations involve detailed ASF (Available Stable Funding) and RSF (Required Stable Funding) factors for different funding sources, assets, and activities. For regulatory reporting, banks must use the full regulatory framework with all applicable factors.