ISDA/GFMA/IIF Global NSFR Briefing Note

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.

Paper on Market Integration Plans

On March 20, ISDA shared its position paper on better regulation and supervision within the European Commission’s (EC) Market Integration and Supervision Package (MISP) proposal with decision makers in the European Parliament, the Council of the European Union and the...