Basel’s Bank Funding Disclosure Proposal: A Good Start, But It Does Not Go Far Enough

Basel’s Bank Funding Disclosure Proposal: A Good Start, But It Does Not Go Far Enough

On Dec. 9, 2014, the Basel Committee on Banking Supervision published a consultative document on its proposed net stable funding ratio (NSFR) disclosure standards, under which banks will disclose the proportion of their long-term assets that are funded by long-term, stable funding. The committee intends to introduce the NSFR as a minimum standard by Jan. 1, 2018. The main purpose of the NSFR is to reduce refinancing risks for banks by requiring them to better match their asset and liability profiles, while allowing banks to perform maturity transformation that serves economic needs. The disclosure standards aim to improve transparency and enhance market discipline. In this article, we provide our analytical opinion of the proposed disclosure standards based on our understanding of the document.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s