On December 9, 2014, the Basel Committee issued a consultative paper on the net stable funding ratio (“NSFR”) disclosure standards, following the publication of the NSFR standard in October 2014. The NSFR is a ratio structure requiring banks to address any liquidity mismatches and seeking to align the funding of longer-term illiquid assets with more stable financing, so as to reduce the risk of a bank’s failure, which could potentially lead to broader systemic stress. The disclosure requirements aim to improve liquidity risk management, enhance the transparency of regulatory funding requirements and strengthen market discipline. In order for market participants to be able to consistently assess the funding risks of banks, it is important that a common disclosure framework be adopted. The disclosure standards are expected to come into effect from January 1, 2018 and would apply to all internationally active banks on a consolidated basis, though may be used for other banks and on any subset of entities of internationally active banks. Disclosure would be required as often as financial statements are published, and common templates will be used. The consultation closes on March 6, 2015.
The consultation document is available at: