The correct answer is: C. Net stable funding ratio.
The NSFR is a liquidity risk measure that was introduced by the Basel Committee on Banking Supervision (BCBS) in 2014. It is designed to ensure that banks have a stable funding profile over a one-year horizon. The NSFR is calculated as the ratio of a bank’s available stable funding (ASF) to its required stable funding (RSF).
ASF is calculated as the sum of a bank’s unsecured and secured short-term and long-term funding, plus its own funds. RSF is calculated as the sum of a bank’s on-balance sheet and off-balance sheet exposures, plus its own funds.
The NSFR is a risk-based measure, which means that it takes into account the different risks associated with different types of funding. For example, unsecured funding is considered to be more risky than secured funding, and short-term funding is considered to be more risky than long-term funding.
The NSFR is a binding requirement for all internationally active banks. Banks are required to maintain an NSFR of at least 100%. The NSFR is calculated on a quarterly basis and is reported to the BCBS.
The NSFR is designed to reduce the risk of bank runs and to ensure that banks have a stable funding profile over a one-year horizon. The NSFR is a forward-looking measure, which means that it takes into account a bank’s
expected funding needs over the next year.The NSFR has been criticized for being too complex and for being difficult to implement. However, the NSFR is an important tool for reducing systemic risk and for ensuring the stability of the financial system.
The other options are incorrect because they are not the full form of NSFR.