Under the Basel III framework, the 'Liquidity Coverage Ratio' (LCR) requires banks to hold sufficient high-quality liquid assets to survive a severe 30-day stress scenario, while the 'Net Stable Funding Ratio' (NSFR) ensures banks maintain a stable funding profile over a one-year horizon.

Answer: True

These two ratios were introduced to prevent the liquidity crises that caused bank failures in 2008. The LCR is a short-term survival metric, ensuring banks have enough cash or easily sellable government bonds to withstand a sudden 30-day run on deposits. The NSFR is a long-term structural metric, forcing banks to fund long-term illiquid assets (like 20-year mortgages) with stable, long-term liabilities (like equity or long-term bonds), rather than relying on volatile short-term wholesale borrowing.