ERM Glossary: Available Stable Funding (ASF)

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The concept of available stable funding (ASF) is used in the computation of the Net Stable Funding Ratio being introduced by Basel III.

ASF is defined by Basel III as the total amount of a bank’s capital, preferred stock with maturity equal to or greater than one year, liabilities with effective maturities of one year or greater, the portion of non-maturity deposits and/or term deposits with maturities of less than one year that would be expected to stay with the institution for an extended period in an idiosyncratic stress event and the portion of wholesale funding with maturities of less than a year that is expected to stay with the institution for an extended period in an idiosyncratic stress event. Extended borrowing from central bank lending facilities outside regular open market operations are not considered in this ratio, in order not to create a reliance on the central bank as a source of funding.

To calculate the ASF, the carrying value of an institution’s equity and liabilities is multiplied by an ASF factor, the maximum value for which depends on the type funding as set out in paragraph 128 of the Basel III liquidity proposals, i.e. BCBS (2010a).

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