The Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation have finalized a rule called the Net Stable Funding Ratio (NSFR). This rule is designed to ensure large banking organizations maintain stable funding over a one-year period to support their various financial activities. By requiring stable funding, the rule aims to reduce liquidity risks, ensuring banks can continue to operate smoothly even in challenging economic conditions. This rule applies to large U.S. banks and some foreign banks with significant assets, enhancing the overall stability of the financial system.
Simple Explanation
The government made a new rule for big banks to make sure they always have enough safe money set aside, so they can keep running smoothly even if things get tough in the economy. This helps keep everyone's money safer in the bank!