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

  • Bowo Setiyono Universitas Gadjah Mada
  • Ahmad Maulin Naufa Universitas Gadjah Mada, Bina Nusantara University.
Keywords: Net stable funding ratio, Liquidity, Risk, Bank, Performance

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 Islamic
banks). Overall, NSFR implementation brings benefits in the form of risk reduction rather than performance improvement to banks around the world.

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Published
2021-01-22
How to Cite
Setiyono, B., & Naufa, A. (2021). THE IMPACT OF NET STABLE FUNDING RATIO ON BANK PERFORMANCE AND RISK AROUND THE WORLD. Buletin Ekonomi Moneter Dan Perbankan, 23(4), 543 - 564. https://doi.org/10.21098/bemp.v23i4.1166
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Articles