THE IMPACT OF NET STABLE FUNDING RATIO ON BANK PERFORMANCE AND RISK AROUND THE WORLD

Authors

Bowo Setiyono, Universitas Gadjah Mada, Indonesia
Ahmad Maulin Naufa, Universitas Gadjah Mada, Indonesia

Document Type

Article

Abstract

This study examines whether liquidity, as measured by net stable funding ratio (NSFR), impacts bank performance and risk. Based on an annual panel data set consisting of 2,909 banks from 127 countries, we find that NSFR reduces both performance and risk. These results are uniquely different in the robustness analysis under various settings (non-linear relationships, high versus low NSFR, and conventional versus Islamicbanks). Overall, NSFR implementation brings benefits in the form of risk reduction rather than performance improvement to banks around the world.

Recommended Citation

Setiyono, Bowo and Naufa, Ahmad Maulin (2020) "THE IMPACT OF NET STABLE FUNDING RATIO ON BANK PERFORMANCE AND RISK AROUND THE WORLD," Bulletin of Monetary Economics and Banking: Vol. 23: No. 4, Article 2.
DOI: https://doi.org/10.21098/bemp.v23i4.1166
Available at: https://bulletin.bmeb-bi.org/bmeb/vol23/iss4/2

First Page

543

Last Page

564

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

Universitas Gadjah Mada