Net stable funding ratio measures stability over what horizon?

• A. One month
• B. One year
• C. Two years
• D. Five years

Answer: (B)

Net stable funding ratio focuses on funding stability over a one-year horizon. It checks that a bank has enough stable funding to support its activities for the next 12 months by comparing available stable funding to required stable funding. This one-year focus helps ensure resilience against funding disruptions that could unfold over annual cycles, rather than just very short-term liquidity or multi-year funding plans. In practice, NSFR is built around the formula ASF over RSF with a target of at least 1.0. Shorter horizons (like one month) relate more to the liquidity coverage concept, while longer horizons (two or five years) are not what NSFR measures.