Liquidity Day 6 💧 NSFR explained simply. #Banking #Liquidity #finance q
23 April 2026·1 min
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Welcome to Day 6 of the Industry Portal liquidity management course, where we break down the Net Stable Funding Ratio (NSFR) — the key metric for long term liquidity risk in banking.
In this session, you will learn how the NSFR ensures that banks fund long term and illiquid assets with stable sources of funding, reducing reliance on short term markets and improving structural resilience.
We explain the NSFR framework step by step, including how Available Stable Funding (ASF) and Required Stable Funding (RSF) are calculated. You will understand how different funding sources such as retail deposits, corporate deposits, long term debt, and equity are treated, and how stability factors reflect real world behaviour during stress.
On the asset side, we explore how loans, securities, derivatives, and off balance sheet exposures drive funding requirements based on their liquidity and maturity characteristics.
The session also highlights the key differences between NSFR and LCR, showing how a bank can meet short term liquidity requirements while still carrying long term funding risk.
You will gain insight into how banks manage NSFR in practice, including internal targets, funding strategy, and the role of Treasury, Risk, and Finance in maintaining compliance and resilience.
From a regulatory perspective, we explain how supervisors such as the Prudential Regulation Authority and the European Central Bank assess NSFR as part of Basel III, ILAAP, and SREP frameworks.
By the end of this session, you will understand why NSFR is critical for long term funding stability and how it shapes balance sheet strategy, product design, and risk management across banks.
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Subscribe for the full liquidity management course.
#NSFR #LiquidityManagement #Banking #Finance #Treasury #RiskManagement #BaselIII #FundingStrategy #TheIndustryPortal
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