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Net Stable Funding Ratio (NSFR)

A Basel III rule that a bank must fund its assets with enough stable funding over a one year horizon.

The Net Stable Funding Ratio compares the stable funding a bank actually has, its available stable funding, to the stable funding its assets and activities require, its required stable funding, measured over one year. The ratio must be at least one hundred percent.

Where the LCR protects against a short, sharp stress, the NSFR pushes banks toward durable funding and away from over reliance on short term wholesale money.

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