Regulatory Agencies Propose Rule To Implement Net Stable Funding Ratio Requirements

Pursuant to the Basel III framework, the Office of the Comptroller of the Currency, the U.S. Treasury Department, the Board of Governors of the Federal Reserve System (the "FRB") and the FDIC proposed a rule to implement a net stable funding ratio ("NSFR") requirement for large and internationally active banking organizations. The proposed rule amends certain definitions in the liquidity coverage ratio rule that are applicable to the NSFR.

The NSFR is a quantitative metric designed to measure the stability of a bank's funding profile. The proposed NSFR requirement is intended to reduce the likelihood that disruptions to a bank's regular sources of funding will compromise its liquidity position. Under the proposed requirement, a covered company calculates a weighted measure of the stability of its equity and liabilities (its available stable funding amount, or "ASF amount") over a one-year time horizon. The ASF amount must be greater than or equal to a minimum level