Funds Transfer Pricing, Liquidity Premium and Market Structure

14 Pages Posted: 7 Jul 2017 Last revised: 2 Dec 2017

See all articles by Ted Lindblom

Ted Lindblom

Göteborg University - School of Business, Economics and Law

Viktor Elliot

School of Business, Economics & Law

Date Written: July 3, 2017

Abstract

Funds transfer pricing (FTP) is widely acknowledged as an important part of banks’ asset and liability management (ALM). This paper makes two contributions to the existing FTP-theory. First, we analyze the implications of adding a liquidity premium to the FTP. Second, since a majority of the existing banking markets are dominated by a limited number of large banks we also cover the case of kinked demand and supply curves on oligopolistic and oligopsonistic competition, respectively.

Keywords: Funds Transfer Pricing, FTP, Oligopoly, Oligopsony, Banks

JEL Classification: D4, L1

Suggested Citation

Lindblom, Ted and Elliot, Viktor, Funds Transfer Pricing, Liquidity Premium and Market Structure (July 3, 2017). Available at SSRN: https://ssrn.com/abstract=2996419 or http://dx.doi.org/10.2139/ssrn.2996419

Ted Lindblom

Göteborg University - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden
+46317861497 (Phone)
+46317864492 (Fax)

HOME PAGE: http://www.cff.handels.gu.se/faculty-presentation/ted-lindblom/

Viktor Elliot (Contact Author)

School of Business, Economics & Law ( email )

Box 640
Gothenburg, 403 50
Sweden

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