How the NSFR Calculator works
The Net Stable Funding Ratio (NSFR) is a Basel III liquidity standard designed to reduce the chance that a bank runs into funding trouble by requiring it to fund longer-term, less-liquid assets with stable sources of funding. This calculator applies the standard NSFR formula to a simplified set of balance-sheet categories so you can see how the ratio moves as funding mix and asset composition change.
The formula
NSFR = Available Stable Funding (ASF) ÷ Required Stable Funding (RSF), expressed as a percentage.
ASF is built by multiplying each funding source by a Basel III ASF factor that reflects how reliable it is over a one-year horizon: capital and funding with residual maturity of one year or more get 100%, stable retail/small-business deposits get 95%, and less stable deposits or short-term wholesale funding get 50%. RSF is built the same way on the asset side: cash and Level 1 high-quality liquid assets (HQLA) get a low factor (around 5%), Level 2 HQLA and loans under one year get around 50%, and mortgages or other loans of one year or more get around 65%. Multiply each balance-sheet category by its factor, sum each side, and divide.
Worked example
With $30,000,000 of capital and long-term funding, $55,000,000 of stable deposits, and $15,000,000 of less-stable funding, ASF = (30,000,000 × 1.00) + (55,000,000 × 0.95) + (15,000,000 × 0.50) = $89,750,000. With $10,000,000 of cash/Level 1 HQLA, $80,000,000 of short-term loans and Level 2 HQLA, and $50,000,000 of mortgages and other long-term loans, RSF = (10,000,000 × 0.05) + (80,000,000 × 0.50) + (50,000,000 × 0.65) = $73,000,000. NSFR = 89,750,000 ÷ 73,000,000 ≈ 122.9%, comfortably above the 100% Basel III minimum.
What moves the ratio
- Funding stability: shifting balances from less-stable, short-term funding (50% ASF factor) into capital or long-term funding (100% ASF factor) raises ASF and pushes the ratio up.
- Asset liquidity: holding more cash and Level 1 HQLA (low RSF factor) instead of long-term loans (higher RSF factor) lowers RSF and also raises the ratio.
- Balance sheet growth: growing illiquid, long-term assets faster than stable funding pulls the ratio toward — or below — the 100% floor, even if the bank is profitable.
Scope and limits
This calculator uses a simplified six-category version of the full Basel III NSFR framework, which defines dozens of granular asset and liability categories, each with its own factor and maturity bucket, plus separate treatment for derivatives and off-balance-sheet exposures. Use it to understand the mechanics and test directional changes; a bank's actual regulatory NSFR filing follows the complete framework published by the Basel Committee on Banking Supervision (BCBS) and any national regulator adjustments.