Explanation:
To calculate the Net Stable Funding Ratio (NSFR), we must first calculate the total Available Stable Funding (ASF) and the total Required Stable Funding (RSF).
Available Stable Funding (ASF):
Required Stable Funding (RSF):
Net Stable Funding Ratio (NSFR): NSFR = Total ASF / Total RSF NSFR = 71.5 / 82.925 ≈ 0.86222, or 86.2%
Therefore, the NSFR is closest to 86.2%.
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Q.16 Goodwill Bank’s balance sheet contains the following items. The available stable funding (ASF) and required stable funding (RSF) factors for each category of funding capital are also provided:
| Amount | ASF factor | |
|---|---|---|
| Retail Deposits | 35 | 90% |
| Wholesale Deposits | 50 | 50% |
| Tier 2 Capital | 5 | 100% |
| Tier 1 Capital | 10 | 100% |
| Amount | RSF Factor | |
|---|---|---|
| Cash | 7 | 0% |
| Mortgages | 38 | 65% |
| Treasury Bonds | 6.5 | 5% |
| Small Business Loans | 54 | 85% |
| Fixed Assets | 12 | 100% |
Which of the following is closest to the net stable funding ratio?
A
84.9%
B
86.2%
C
83.1%
D
88.0%
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