NSFRSI Meaning and
Definition
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NSFRSI stands for Net Stable Funding Ratio Stress Inclusion. In the context of banking and financial regulations, it is a metric used to assess a bank's ability to maintain a stable funding profile over a specified time horizon, usually one year, during both normal and stress conditions.
The Net Stable Funding Ratio (NSFR) is a regulatory requirement introduced by the Basel Committee on Banking Supervision (BCBS) as a part of the Basel III framework. It measures the stability of a bank's funding sources relative to the liquidity of its assets. The NSFR aims to ensure that a bank has a more stable and resilient funding structure, reducing the risk of funding disruptions in times of stress.
The inclusion of Stress (NSFRSI) refers to the requirement that banks calculate the NSFR metric under both normal and stressed conditions. The stress scenario aims to simulate severe market disruptions or economic downturns to test a bank's resilience.
The NSFRSI entails estimating the net stable funding available during a stressful period, considering factors such as outflows and inflows of funding, requiring banks to maintain a certain level of stable funding. It aims to encourage banks to rely on more stable, long-term funding sources instead of short-term funding that may be more vulnerable to drying up during crises.
By including the stress factor in the calculation, regulators can identify banks that may be at risk of funding shortfalls during stress situations and take appropriate action, such as adjusting capital requirements or liquidity buffers, to enhance financial stability.
Common Misspellings for NSFRSI
- nasfrs
- msfrsi
- jsfrsi
- hsfrsi
- nzfrsi
- nxfrsi
- ndfrsi
- nefrsi
- nwfrsi
- nscrsi
- nsvrsi
- nsgrsi
- nstrsi
- nsrrsi
- nsfesi
- nsfdsi
- nsffsi
- nsftsi
- nsf5si
- nsf4si
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