
Explanation:
The Net Stable Funding Ratio (NSFR) is the correct answer because it includes regulatory capital in the numerator. The NSFR is defined as:
Where Available Stable Funding (ASF) includes:
In contrast:
The NSFR was introduced under Basel III to ensure banks maintain stable funding profiles over a one-year horizon, and regulatory capital is explicitly included in the ASF component as it represents the most stable form of funding.
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Which of the following Basel liquidity ratios includes regulatory capital in the numerator?
A
Return on equity (ROE)
B
Net interest income (NII)
C
Liquidity coverage ratio (LCR)
D
Net stable funding ratio (NSFR)