Beyond the 30-day LCR metric, long-term liquidity structural health is managed via the Net Stable Funding Ratio (NSFR) alongside custom enterprise stress test frameworks.
The Net Stable Funding Ratio Architecture
The NSFR requires institutions to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities over a one-year horizon. The calculation ensures long-term assets are funded by reliable, structural capital:
NSFR = Available Stable Funding / Required Stable Funding

Designing a Liquidity Stress Testing Schedule
[Define Bank Run Parameters] ---> [Apply Haircuts to Asset Values] ---> [Model Cash Flows]
                                                                                |
                                                                                v
[Adjust Contingency Funding] <--- [Identify Liquidity Breaches] <---------------+

Firms design liquidity stress tests to simulate extreme market events, such as a sudden loss of wholesale funding or a rapid withdrawal of customer deposits, ensuring the corporate treasury has access to validated Contingency Funding Plans during a market crisis.
 
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