Revisiting Funds Transfer Pricing
23 Pages Posted: 3 May 2013
Date Written: February 26, 2012
Fundamentally, the objectives of funds transfer pricing (FTP) have remained the same as when it was first developed. However, in the environment of very low interest rates that preceded the recent financial crisis FTP frameworks in many banks have been left underfunded and underdeveloped.
The financial crisis brought FTP into the regulatory spotlight. Regulators expect banks to be able to demonstrate how their FTP frameworks are aligned to the best practice principles for liquidity management.
The paper reflects on the fundamental aspects of a FTP framework and its role in a bank.
Keywords: Funds transfer pricing, FTP
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