Non-maturity deposits (NMDs) are a foundational source of stability and flexibility for banks, helping manage interest rate risk within the banking book (IRRBB). The Basel Committee on Banking Supervision (BCBS) provides a framework for categorizing NMDs as core or non-core, stable or non-stable, allowing banks to create a strategic hedge against interest rate volatility. It’s critical to note that the IRRBB definitions differ from those for liquidity metrics like the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), where stability is more about.... Click to continue reading
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