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AmEx debuts with second-lowest unadjusted NSFR

Created at 31 Aug · 3:41 AM1 source↑ Market-relevant
IN SHORT

American Express reported an unadjusted net stable funding ratio of 103.1% in the second quarter, the second-lowest among 21 US banks subject to the ratio. This disclosure follows its reclassification into Category III under the Federal Reserve's tailoring framework.

Key Numbers

103.1%American Express unadjusted NSFR in Q2
21US banks subject to NSFR

Who's Involved

American Express
Reported second-lowest unadjusted NSFR among US banks
Federal Reserve
Sets tailoring framework and NSFR requirements for banks

↳ Why This Matters

The NSFR is a regulatory metric designed to ensure banks maintain a stable funding profile. A lower NSFR suggests a greater reliance on short-term funding, potentially increasing risk. AmEx's position indicates a need to manage its funding structure as regulatory requirements evolve.

Key facts

  • American Express's unadjusted net stable funding ratio (NSFR) was 103.1% in the second quarter.
  • This is the second-lowest NSFR among the 21 US banks subject to the ratio.
  • The disclosure is AmEx's first NSFR report following its move into Category III under the Federal Reserve's tailoring framework in 2024.
  • The transition to Category II is anticipated to reduce the bank's funding cushion from 2027.

American Express reported an unadjusted net stable funding ratio (NSFR) of 103.1% in the second quarter, positioning it with the second-lowest ratio among the 21 U.S. banks subject to the requirement. This disclosure marks the bank's initial NSFR report since its reclassification into Category III under the Federal Reserve's tailoring framework in 2024. The bank's NSFR position contrasts with its liquidity coverage ratio. Analysts anticipate that the transition to Category II will likely diminish the bank's funding cushion starting in 2027.

Frequently asked questions

The NSFR is a regulatory liquidity ratio that requires banks to maintain a minimum amount of stable funding relative to their assets and off-balance sheet activities.

The tailoring framework, established by the Fed, categorizes banks based on size and complexity, applying different regulatory requirements, including NSFR, to each category.

Category III and II represent different tiers within the Fed's tailoring framework, with Category II typically having more stringent requirements than Category III, especially concerning liquidity and capital.

What Happens Next

01Monitor AmEx's NSFR in subsequent quarters.
02Observe the impact of the Category II transition on AmEx's funding cushion from 2027.
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How It Developed

American Express reported an unadjusted net stable funding ratio of 103.1% in Q2.
This is the second-lowest NSFR among 21 US banks subject to the ratio.
The disclosure marks AmEx's first NSFR report since its reclassification into Category III under the Fed's tailoring framework in 2024.
The transition to Category II is expected to reduce the bank's funding cushion starting in 2027.

Sources

T1
AmEx debuts with second-lowest unadjusted NSFRRisk.net

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