A Problem Exists with the Net Stable Funds Ratio (NSFR)

question 48

True/False

A problem exists with the net stable funds ratio (NSFR) in that it does not include off-balance-sheet activities.

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Definitions:

Teller's Check

A check drawn by a bank on its own funds and signed by a teller, often used in situations requiring guaranteed funds.

Depository Bank

A financial institution that holds and manages securities and assets on behalf of investors, such as stocks and bonds.

Payor Bank

A bank that is responsible for paying a check or draft presented for payment.

Intermediary Bank

Any bank, other than a payor or depository bank, that transfers a check during the check collection process.