The Net Stable Funding Ratio Requirement When Money is Endogenous

9 Pages Posted: 31 Jan 2015

Date Written: January 26, 2015

Abstract

​The NSFR regulation reduces banks’ liquidity risks by encouraging the use of deposit funding. Deposit money is created by lending, but the requirement restricts possibilities to grant loans. This contradiction may be destabilising if there is a substantial foreign debt.

Keywords: net stable funding ratio, endogenous money, liquidity regulation

JEL Classification: E51, G21, G28

Suggested Citation

Kauko, Karlo, The Net Stable Funding Ratio Requirement When Money is Endogenous (January 26, 2015). Bank of Finland Research Discussion Paper No. 1/2015, Available at SSRN: https://ssrn.com/abstract=2557993 or http://dx.doi.org/10.2139/ssrn.2557993

Karlo Kauko (Contact Author)

Bank of Finland ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland

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