Skip to content

FRM Part II · FRM Exam Part II · Solvency, Liquidity and Other Regulation After the Global Financial Crisis

Which of the following is a feature of the Net Stable Funding Ratio (NSFR) rather than the LCR?

The NSFR compares available stable funding with required stable funding over a one-year horizon, with a 100% minimum. Run-off rates, the 75% inflow cap and HQLA haircuts are LCR mechanics tied to the 30-day stress.

  1. AIt compares available stable funding with required stable funding over a one-year horizonCorrect
  2. BIt applies run-off rates to retail deposits over a 30-day stress period
  3. CIt limits the recognition of cash inflows to 75% of outflows
  4. DIt requires a stock of Level 1 and Level 2 assets with haircuts

Explanation

The NSFR sets available stable funding (capital and liabilities weighted by stability) against required stable funding based on asset liquidity and maturity, over one year, with a minimum of 100%. The other options are LCR features.

Did you get it right without looking?

One question tells you little. A timed set on Solvency, Liquidity and Other Regulation After the Global Financial Crisis shows your real accuracy, how long you take and where you lose marks.

Practise Solvency, Liquidity and Other Regulation After the Global Financial CrisisFree diagnostic mock

More Solvency, Liquidity and Other Regulation After the Global Financial Crisis questions