To further harmonize the rules for the Ukrainian banking sector operation with European laws, the NBU continues to implement the previously announced regulatory requirements for the banks, specifically on the net stable funding ratio (NSFR).
As previously reported, this prudential standard was adopted by NBU Board Resolution No. 158 dated 24 December 2019 and has been in effect since 1 April 2021.
The NSFR determines the minimum required level of bank liquidity for a one-year horizon and helps attract more stable and long-term sources of funding, reducing the banks' dependence on short-term resources.
Extension of the maturity of the funding base by the banks is a prerequisite for reducing risks for the FX market and international reserves, maintaining exchange rate stability and a steady decline in inflation, and improving inflation expectations.
The initial value of the NSFR and the timeframe for its gradual implementation are defined in NBU Board Resolution No. 166 dated 22 December 2020. According to the transition period established by said Resolution, the minimum value of the NSFR as of 1 April 2022 should be at least 100%.
NBU Board Resolution No. 40, dated 7 March 2022, extended the transition period for the introduction of the 100% NSFR by one year, i.e. until 1 April 2023.
Thus, as of 1 April 2023, the minimum value of the NSFR for all currencies is 100%, which complies with EU laws.