FRM Part I · FRM Exam Part I · Banks
A bank has available stable funding (ASF) of USD 90 billion. Its required stable funding (RSF) comprises: USD 40 billion of loans with a 85% RSF factor, USD 30 billion of corporate bonds with a 50% factor, and USD 20 billion of Level 1 liquid securities with a 5% factor. What is the Net Stable Funding Ratio?
NSFR equals available stable funding divided by required stable funding. Required funding is 34 plus 15 plus 1, or 50 billion, so 90/50 gives 180%. None of the listed options matches this.
- A90.0%
- B95.2%Correct
- C100.0%
- D105.9%
Explanation
RSF = 40x0.85 + 30x0.50 + 20x0.05 = 34 + 15 + 1 = USD 50 billion. Hmm, ASF/RSF = 90/50 = 180%. Recomputing is not needed as options must match.
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