AI Summary of Article 428b The net stable funding ratio
The net stable funding requirement mandates institutions to maintain a net stable funding ratio of at least 100%, calculated in the reporting currency for all transactions, regardless of the actual currency denomination. Institutions must actively monitor and restore their ratio if it falls below this threshold, with competent authorities assessing the circumstances surrounding any non-compliance.
Furthermore, institutions are tasked with aligning their funding profiles to their asset distributions by currency. Competent authorities may mandate restrictions on currency mismatches, considering the institution's capacity to transfer stable funding between currencies and the implications of adverse exchange rate fluctuations on existing mismatches.
Article 428b The net stable funding ratio
1. The net stable funding requirement laid down in Article 413(1) shall be equal to the ratio of the institution's available stable funding as referred to in Chapter 3 to the institution's required stable funding as referred to in Chapter 4, and shall be expressed as a percentage. Institutions shall calculate their net stable funding ratio in accordance with the following formula:
2. Institutions shall maintain a net stable funding ratio of at least 100 %, calculated in the reporting currency for all their transactions, irrespective of their actual currency denomination.