Korea will introduce NSFR
requirements in January 2018, and we expect all Korean banks to meet the 100 percent minimum.
In his regression models, he works with liquidity indicators included in the Basel III concept: LCR (high quality liquid assets/total net outflow over the next 30 calendar days) and NSFR
(the available amount of stable funding/required amount of stable funding).
Bech and Keister, 2013), the NSFR
involves changes in banks' structural funding composition, indirectly affecting money markets and participation in monetary policy operations.
has not yet been definitively adopted, but its objective is to discourage banks from relying heavily on short-term funding from the wholesale markets.
The requirements relating to enhanced risk management, governance, liquidity, such as LCR and NSFR
, maintenance of higher capital buffers such as the counter cyclical buffers and tighter rules around composition of capital will all contribute to boosting the capital requirements of Islamic financial institutions.
asset proportions over a thirty day period, the NSFR
attempts to provide
Under consideration is what is called a net stable funding ratio, or NSFR
98) The NSFR
is the minimum standard of assets a bank must keep that are deemed stable over a one-year period.
The numerator of the NSFR
would be computed using banks' "available stable funding sources" (ASF) in the numerator divided by assets that "require stable funding" (RSF) in the denominator.
LCR regulates 30-day liquidity, while NSFR
addresses liquidity-fund need within one year.
Under the NSFR
standard, available stable funding must exceed required stable funding.
Local authorities stated that an NSFR
requirement would go into effect in January of next year but have yet to announce any specific rules.