easy · FRM Part 2 Liquidity & Treasury Risk
If a bank has $10 billion in Available Stable Funding (ASF) and $12 billion in Required Stable Funding (RSF), which statement best describes its regulatory standing regarding structural liquidity?
- The bank is compliant with the NSFR because the funding gap is only $2 billion in absolute terms.
- The bank is in breach because regulators require ASF to equal at least 150% of RSF at all times.
- The bank is in breach of the NSFR requirement as the ratio is 83.3%, falling below the 100% minimum.
- The bank remains compliant as long as its separately reported LCR stays comfortably above the 100% threshold.
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