But that focus means a change in the way banks look at their operations, said Mayra Rodriguez Valladares, the managing principal of consulting firm MRV Associates.
Traditionally, banks have taken out short-term financing to fund their operations while lending out money on a longer-term horizon, she said.
And then “we go ahead and buy the bonds and stocks of these banks, which are very opaque and have this bizarre model of borrowing short and lending long,” she said. “And that works until it doesn’t.”
The NSFR “is fundamentally a rule to change the bank structurally,” Rodriguez Valladares added.