NSFR 💧 Long term liquidity explained. How banks stay funded. #Banking #Liquidity #finance
10 April 2026·1 min
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Welcome to this session from the Industry Portal liquidity management course, where we focus on the long term side of liquidity risk through the Net Stable Funding Ratio (NSFR).
While the Liquidity Coverage Ratio focuses on short term survival, the NSFR is designed to protect banks from structural liquidity risk by ensuring that long term and illiquid assets are funded with stable sources of funding.
In this video, we break down how the NSFR works in practice. You will learn how available stable funding and required stable funding are calculated, and how different funding sources such as retail deposits, corporate deposits, long term debt, equity, and wholesale funding are treated under Basel III rules.
We also explore how assets such as loans, securities, derivatives, and off balance sheet exposures drive funding requirements based on their liquidity and maturity. The session highlights why banks can appear strong in the short term but still carry significant long term funding risks.
You will gain practical insight into how banks manage NSFR day to day, including the roles of Treasury, Risk, and Finance, the use of internal targets above regulatory minimums, and how funds transfer pricing embeds structural liquidity costs into business decisions.
From a regulatory perspective, we explain how frameworks from the Prudential Regulation Authority and European Banking Authority assess NSFR through Basel III, ILAAP, and SREP, and how supervisors monitor structural funding risks across entities and jurisdictions.
By the end of this session, you will understand how the NSFR complements short term liquidity measures and why it is essential for long term banking resilience.
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#NSFR #LiquidityManagement #Banking #Finance #Treasury #RiskManagement #BaselIII #ILAAP #theindustryportal
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