Iceland introduces foreign currency funding rule based on Basel Committee's NSFR

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The Central Bank of Iceland (CBI) today adopted new rules that aim to limit the degree to which banks can rely on unstable short-term funding to finance long-term lending in foreign currencies.

The policy is based on the net stable funding ratio (NSFR) developed by the Basel Committee on Banking Supervision, but focused purely on foreign exposures. It covers banks' funding needs over a period of 12 months.

Furthermore, the CBI plans to implement another 'foreign currency NSFR' covering periods o

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