NSFR Calculator

What Is NSFR?

NSFR stands for Net Stable Funding Ratio.

It measures how well a bank is funded over a one-year period.

The formula is:

NSFR = Available Stable Funding ÷ Required Stable Funding × 100

If the result is 100% or higher, the bank is compliant.

If it is below 100%, the bank does not meet regulatory standards.

Why NSFR Is Important

NSFR was introduced after the 2008 financial crisis. Many banks relied too much on short-term borrowing. When markets froze, they ran out of money.

NSFR solves this problem by forcing banks to:

• Use more stable funding
• Reduce risky funding sources
• Improve long-term planning
• Protect depositors
• Reduce systemic risk

In short, NSFR makes banks safer and more resilient.

Understanding the Two Main Components

Every NSFR calculation has two main parts:

1. Available Stable Funding (ASF)
2. Required Stable Funding (RSF)

Let’s look at each one.

Available Stable Funding (ASF)

ASF represents how reliable a bank’s funding is.

Some funding sources are more stable than others. Each source is given a weighting factor.

In your calculator, ASF includes:

1. Capital and Liabilities Over 1 Year (100%)

• Long-term debt
• Equity capital
• Stable bonds

These are very reliable. That is why they get a 100% factor.

2. Stable Retail Deposits (90%)

• Savings accounts
• Term deposits
• Loyal customers

These are usually not withdrawn quickly.

3. Less Stable Retail Deposits (80%)

• High-interest deposits
• Large balances
• Volatile accounts

These may leave faster during stress.

4. Wholesale Funding Under 1 Year (50%)

• Interbank loans
• Short-term borrowings

These are risky and unstable, so they get a lower factor.

How ASF Is Calculated

Each amount is multiplied by its factor.

Example:

• Capital: $1,000,000 × 1.0 = $1,000,000
• Stable deposits: $500,000 × 0.9 = $450,000

Total ASF = $1,450,000

Required Stable Funding (RSF)

RSF shows how much stable funding a bank needs for its assets.

Some assets are easy to sell. Others are locked in for years. Riskier assets require more stable funding.

In your calculator, RSF includes:

1. Cash and Central Bank Reserves (0%)

• Physical cash
• Reserve accounts

These need no stable funding.

2. Unencumbered HQLA (5%)

• Government bonds
• High-quality securities

They are easy to sell.

3. Corporate Loans Over 1 Year (100%)

• Long-term business loans
• Project finance

Very illiquid. High risk.

4. Retail Loans (85%)

• Personal loans
• Auto loans
• Credit products

Moderate stability.

5. Mortgages (65%)

• Home loans
• Property loans

More stable than business loans.

How RSF Is Calculated

Each asset is multiplied by its RSF factor.

Example:

• Loans: $800,000 × 1.0 = $800,000
• Mortgages: $400,000 × 0.65 = $260,000

Total RSF = $1,060,000

How the NSFR Calculator Works

Your calculator follows four main steps.

Step 1: Collect Input Values

Users enter:

• Funding amounts (ASF section)
• Asset values (RSF section)

Each input has a built-in factor.

Step 2: Calculate Total ASF

The script multiplies:

Value × Factor

Then adds all results.

Step 3: Calculate Total RSF

The same method is used for RSF inputs.

Step 4: Calculate the Ratio

NSFR = (Total ASF / Total RSF) × 100

If RSF is zero, the system returns 100%.

Step 5: Display Status

The calculator shows:

• NSFR percentage
• Total ASF
• Total RSF
• Compliance status

Results are color-coded:

• Green: Compliant
• Red: Non-compliant

How to Use the NSFR Calculator

Using the calculator is simple.

Step 1: Enter ASF Values

Fill in:

• Capital and long-term liabilities
• Retail deposits
• Wholesale funding

Enter values in dollars.

Step 2: Enter RSF Values

Fill in:

• Cash
• HQLA
• Loans
• Mortgages

Use accurate balance sheet data.

Step 3: Click “Calculate NSFR”

The system processes your inputs instantly.

Step 4: Review Results

You will see:

• NSFR ratio
• Funding totals
• Compliance status

If the ratio is below 100%, action is needed.

Step 5: Reset if Needed

Click “Reset” to clear all inputs.

Example Calculation

Let’s look at a simple example.

ASF Inputs

• Capital: $2,000,000
• Stable Deposits: $1,000,000
• Less Stable Deposits: $500,000

ASF =
(2,000,000 × 1.0) +
(1,000,000 × 0.9) +
(500,000 × 0.8)

= $3,300,000

RSF Inputs

• Loans: $2,000,000
• Mortgages: $1,000,000
• HQLA: $200,000

RSF =
(2,000,000 × 1.0) +
(1,000,000 × 0.65) +
(200,000 × 0.05)

= $2,660,000

NSFR

NSFR = 3,300,000 ÷ 2,660,000 × 100
= 124%

Status: Compliant

Benefits of Using an NSFR Calculator

A good NSFR calculator offers many advantages.

1. Regulatory Compliance

It helps meet Basel III requirements.

2. Risk Management

You can spot funding risks early.

3. Better Planning

It supports long-term balance sheet strategy.

4. Faster Reporting

Manual calculations take time. Automation saves effort.

5. Decision Support

Management can test different funding scenarios.

How to Improve Your NSFR Ratio

If your NSFR is below 100%, you can improve it in two ways.

Increase Available Stable Funding

You can:

• Raise long-term bonds
• Increase equity
• Promote stable deposits
• Reduce short-term borrowing
• Extend funding maturity

Stable funding boosts ASF.

Reduce Required Stable Funding

You can:

• Increase HQLA holdings
• Reduce long-term loans
• Securitize assets
• Sell illiquid assets
• Improve asset quality

Lower RSF improves the ratio.

Best Practice

Strong banks usually work on both sides at once.

They increase ASF and manage RSF carefully.

Common Mistakes to Avoid

Many users make avoidable errors.

1. Using Incorrect Data

Outdated balance sheet figures lead to wrong results.

Always use current numbers.

2. Ignoring Deposit Stability

Not all deposits are equal. Misclassifying them can distort ASF.

3. Overlooking Off-Balance Sheet Items

Some commitments affect funding needs.

Advanced models include them.

4. Treating NSFR as a One-Time Task

NSFR should be monitored regularly, not once a year.

5. Relying Only on Simplified Tools

This calculator is a simplified model.

Real regulatory reporting may require more detail.

Limitations of This Calculator

This tool is useful, but it has limits.

• Uses standard representative factors
• Does not include all Basel III categories
• Does not handle derivatives
• Does not include off-balance exposures
• Is designed for learning and planning

It is best used for:

• Education
• Internal analysis
• Scenario testing
• Preliminary assessment

For official reporting, banks should use regulatory systems.

Who Should Use an NSFR Calculator?

This tool is helpful for:

• Bank risk managers
• Treasury teams
• Compliance officers
• Financial analysts
• Students of finance
• Regulators in training

Anyone working with liquidity risk can benefit.

SEO-Friendly Summary

An NSFR Calculator measures long-term funding stability under Basel III rules.

It works by comparing:

• Available Stable Funding (ASF)
• Required Stable Funding (RSF)

If the result is 100% or more, the bank is compliant.

This calculator:

• Uses weighted funding factors
• Calculates ratios instantly
• Displays compliance status
• Helps improve risk management

It is a simple and effective way to monitor liquidity health.