A final rule promulgated by the OCC, Federal Reserve Board and FDIC that implements a net stable funding ratio ("NSFR") requirement for certain large U.S. banking organizations and U.S. intermediate holding companies of foreign banking organizations was published in the Federal Register. The final rule will go into effect on July 1, 2021. The final rule was adopted, with certain adjustments, to the agencies' 2016 proposal.
The final rule establishes an NSFR to promote the stability of a banking organization's liquidity positions and the efficacy of its liquidity risk management practices. The final rule requires a bank to have - over a one-year time horizon - available stable funding ("ASF") equal to or greater than its "projected minimum funding needs," or required stable funding ("RSF"). The banking organization must maintain an NSFR of at least 1.0 on an ongoing basis, calculated as the ratio of the bank's ASF to RSF amount.
The final rule adopted NSFR public disclosure requirements for domestic top-tier depository institution holding companies and U.S. intermediate holding companies of foreign banking organizations.
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the FDIC requested comments on a proposed rule that would implement a net stable funding ratio requirement for large and internationally active banking organizations. Their request for comments was published in the Federal Register.
Multiple regulators proposed a rule to implement a net stable funding ratio requirement for large and internationally active banking organizations. The ratio requirement enables regulators to identify covered companies that have heightened liquidity risk profiles that could pose significant risks to U.S. financial stability.
Available only to Cabinet Premium subscribers.
Combining regulatory and enforcement news, analysis, and practical work tools on an easy-to-use digital platform.