Implementing the Net Stable Funding Ratio – Regulation Impact Statement – Australian Prudential Regulation Authority
On 20 December 2016, the Australian Prudential Regulation Authority (APRA) released the final revised Prudential Standard APS 210 Liquidity (APS 210) and Prudential Practice Guide APG 210 Liquidity (APG 210) which incorporates, among other things, the Net Stable Funding Ratio (NSFR) requirements for some authorised deposit-taking institutions (ADIs).
The NSFR requires ADIs to fund their activities with more stable sources of funding on an ongoing basis, and thereby promotes greater balance sheet resilience. In particular, the NSFR should lead to reduced reliance on less-stable sources of funding, such as short-term wholesale funding, that proved problematic during the global financial crisis.
The final revised standard APS 210 will commence on 1 January 2018.