FRM Part I · FRM Exam Part I · Banks
A bank's balance sheet shows available stable funding (ASF) of USD 96 billion after applying ASF factors. Required stable funding (RSF) is calculated at USD 80 billion. Which statement about its Net Stable Funding Ratio (NSFR) is correct?
The NSFR is 120%, above the 100% minimum. It equals available stable funding of USD 96 billion divided by required stable funding of USD 80 billion. The bank therefore has sufficient long-term stable funding relative to its assets' liquidity profile and complies with the requirement.
- ANSFR is 83.3%, below the 100% minimum
- BNSFR is 120%, above the 100% minimumCorrect
- CNSFR is 120%, below the 100% minimum
- DNSFR is 83.3%, above the 100% minimum
Explanation
NSFR = ASF / RSF = 96/80 = 120%. The minimum is 100%, so the bank complies. The 83.3% figure comes from inverting the ratio (80/96).
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