Download This PaperFunds Transfer Pricing, Liquidity Premium and Market Structure
14 Pages Posted: 7 Jul 2017 Last revised: 2 Dec 2017
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: 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
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