Basel III: the net stable funding ratio

What it contains

The document presents the net stable funding ratio (NSFR), another of Basel’s key reforms for a more resilient banking sector. It requires banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities, to reduce the likelihood that disruptions to their regular sources of funding erode their liquidity position and increase the risk of failure and systemic stress. It limits overreliance on short-term wholesale funding and promotes better assessment of funding risk.

The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding, and it should be at least 100 % on an ongoing basis. Available stable funding is the portion of capital and liabilities expected to be reliable over the horizon of the ratio, which extends to one year. The document complements the LCR, which covers the short term, and notes that liquidity monitoring tools, in particular the contractual maturity mismatch, are useful to complement the NSFR.

The Committee reviewed the design over an observation period begun in 2010 to address unintended consequences for the functioning of financial markets and the economy, among them the impact on retail banking, the treatment of short-term matched funding of assets and liabilities and the analysis of sub-one-year buckets. The text sets 1 January 2018 as the date on which it becomes a minimum standard.

The old link pointed to a Spanish document of an earlier version that is no longer available on the BIS website; the final standard in English is linked.

Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 7 October 2026. It does not replace reading the official text and is not advice.

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