WHat is the difference bewteen NSFR and LCR:

  • Time Horizon: LCR (30 days) vs. NSFR (1 year)
  • Focus: LCR (Short-term liquidity stresses) vs. NSFR (Longer-term funding stability)
  • Assets Covered: LCR (High-Quality Liquid Assets - HQLA) vs. NSFR (Broader range of stable funding sources)

Both the LCR and NSFR are essential components of the Basel III framework for managing liquidity risk in the banking sector.