Global Regulators Want More Stable Funding At Banks

By Evan Weinberger (October 31, 2014, 12:00 PM EDT) -- Global banks are going to be forced to hold sufficient cash or assets that can be quickly turned into cash to cover their potential losses over the course of a year under a rule finalized by global banking regulators Friday.

The Basel Committee on Bank Supervision's Net Stable Funding Ratio is intended to prevent banks from relying too heavily on short-term funding sources that can be subject to a run, as happened during the 2008 global financial crisis, by forcing them to balance out those sources of funding with deposits and regulatory capital tools like equity.

"A key lesson from the...

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