medium · FRM Part 2 Liquidity & Treasury Risk
An institutional bank calculates its 'Net Stable Funding Ratio' (NSFR).
Which of the following asset-liability combinations most significantly improves the NSFR?
- Extending a 1 bn committed liquidity facility to a financial institution counterparty.
- Replacing 10 bn of short-term (interbank) funding with 10 bn of 2-year corporate bonds.
- Increasing the amount of 'less-stable' retail deposits while reducing the amount of 'stable' insured deposits.
- Selling 5 bn of Level 1 HQLA to fund 5 bn of new residential mortgages.
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