ISDA, GFMA, and IIF welcome the decision by the Basel Committee on Banking Supervision (BCBS) in its review of the net stable funding ratio (NSFR) to give national jurisdictions the ability to lower the punitive 20% add-on for gross derivatives liabilities (GDL) to 5%. We believe the BCBS should adopt the 5% as a permanent measure, as this would reflect an appropriate compromise that would promote international consistency and avoid unintended consequences to derivatives businesses.
To the extent that the BCBS chooses to take no further action and jurisdictions move ahead with implementation of the NSFR, we believe they should do the same. Doing so would also free up resources within both the public and private sectors to focus on other critically important issues, ensure international consistency in the application of a framework and a level playing field for firms across jurisdictions, and avoid a potential increase systemic risk resulting from market fragmentation that would occur if different jurisdictions were subjected to different requirements.
Documents (1) for ISDA/GFMA/IIF Global NSFR Briefing Note
Latest
Response to FCA on CFI Codes for Transparency
On March 19, ISDA responded to Chapter 3 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on transparency requirements for financial instruments under Market Conduct Sourcebook (MAR) 11. Sections 3.11-3.13 of the consultation paper explain a discrepancy between...
Why We Need Safe and Efficient SFT Markets
Securities financing transactions (SFTs) play a vital role in fostering liquidity, mobilizing collateral and supporting the smooth functioning of derivatives markets. But during periods of stress, secured funding markets often come under pressure just when they’re needed most, with reduced...
Response to BoE on Clearing Exemption for PTRR
On March 11, ISDA submitted a response to the Bank of England’s consultation on a proposed approach to exempting post-trade risk reduction (PTRR) transactions from the derivatives clearing obligation under Article 4 of the European Market Infrastructure Regulation (EMIR). ISDA...
IQ Interview with David Bailey
The Bank of England’s Prudential Regulation Authority recently finalized its Basel 3.1 framework for implementation at the start of 2027. David Bailey, executive director for prudential policy, talks to IQ about the importance of global consistency and the need to...