Liquidity Coverage Ratio (LCR) vs. Net Stable Funding Ratio (NSFR) The liquidity coverage ratio and the Net Stable Funding Ratio (NSFR) are necessary regulations that aim to ensure banks have adequate liquidity and funding, especially in times of financial crisis. Both were introduced under the ...
LCR is used to assess a bank's short-term liquidity needs, and NSFR is used for assessing its long-term funding stability. The first abbreviation stands for the liquidity coverage ratio, while the second one for the net stable funding ratio. Can LCR be applied to another industry? Yes, ...
NSFR and the LCR are both capital requirements that a bank must meet in order to be deemed stable. However, they serve different purposes. The LCR is a liquidity requirement while NSFR is a funding requirement. In addition, the LCR only focuses on thirty days of liquidity coverage while NSFR...