How this calculator works
The net stable funding ratio is a Basel III structural funding test. It compares the stable funding a bank has available, weighted by how reliably it would remain during a one-year stress, with the stable funding its assets and off-balance-sheet exposures require. Deposits from small business and retail customers count as more stable than short-term wholesale borrowing, and long-dated loans require more stable funding than liquid securities. A ratio of 100% or more meets the minimum. The tool takes the two weighted totals as inputs, so the Basel weights must be applied before entering them.
Formula
Net stable funding ratio = available stable funding / required stable funding, displayed as a percentage. Available stable funding = target ratio × required stable funding, and required stable funding = available stable funding / target ratio. The surplus is available minus required stable funding.
Worked example
Available stable funding of $100 against required stable funding of $80 gives a net stable funding ratio of 125%, a surplus of $20. To reach 110% against $80 of required funding a bank would need $88 available.
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Frequently asked questions
How is this different from the liquidity coverage ratio?
The liquidity coverage ratio covers a 30-day stress and focuses on liquid assets. The net stable funding ratio covers a one-year horizon and focuses on the mix of funding and assets. A bank can pass one and fail the other.
Which funding counts as available stable funding?
Regulatory capital and long-term liabilities count fully or nearly fully, retail deposits count at high weights, and short-term wholesale funding counts at low weights. The weights come from the Basel standard, not from the balance sheet total.
Why is 100% the minimum?
At 100%, the stable funding available covers the stable funding required for the bank's asset profile over a year of stress. Values below 100% mean the bank relies on less stable funding than its assets warrant.