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Net Stable Funding Ratio Comment Letter

We applaud the rule’s objective – to ensure that large and globally-active U.S. banks have sufficient liquidity to withstand a one-year period of extended stress. We especially are pleased with the creation of a one-year liquidity metric. While these objectives are important, the implementation as proposed creates a number of issues which we believe can be easily addressed by policy makers.

In this letter, we raise seven concerns about the NSFR proposal. They include:

1. Impaired maturity transformation
2. Negative procyclical distortions
3. Reduced market access to capital
4. Uncertainty due to Fed balance sheet overhang
5. Systemic risk dispersion
6. Premature timing
7. Excessive costs and complexity due to redundancy

For more information