“NSFR is basically a regulatory requirement for the banks to generally maintain a liquid position long enough to sustain it for a one year period,” Espenilla said. This would provide banks with a minimum liquidity buffer to be able to take corrective action to address a liquidity stress event. Under a strong regulatory framework, the BSP chief is confident the channels to which the liquidity passes through banks are going to be responsible. The regulator is issuing a four-phased regulatory reform to reinforce the capability of banks in managing liquidity risk. It has approved last month the guidelines on the LCR, the complementary Minimum Liquidity Ratio (MLR) for thrift and rural banks as well as the NSFR.

Source: Philippine Star May 29, 2018 15:43 UTC