The net stable funding ratio requirement when money is endogenous

Karlo Kauko

No 1/2015, Bank of Finland Research Discussion Papers from Bank of Finland

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 (search for similar items in EconPapers)
JEL-codes: E51 G21 G28 (search for similar items in EconPapers)
Date: 2015
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