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Funds Transfer Pricing in Emerging Markets

Industry Survey: How to implement a Risk-Adjusted Performance framework without market benchmarks?

Over the past few years, Funds Transfer Pricing has been increasingly subject to scrutiny and debate across banking organisations, and regulators have stressed its importance for sound liquidity risk management via a proper attribution of funding costsFTP revolutionises the way institutions look at the banking business: it changes the performance management criteria, unveils the profitability of each product and dramatically modifies the approach to customer pricing. In emerging countries, the illiquidity of the local financial markets for funding and derivative instruments, the consolidated practice to fund asset portfolios with customer deposits and the unique characteristics of the balance sheet products raise further challenges when defining the FTP methodology and framework. 

Prometeia and Marcus Evans prepared a quick survey to gather the banks’ priorities all over the world. Take a few minutes to answer the 9 questions via the link below and tell us about your concerns and the challenges your bank must face in terms of FTP methodology and implementation.

Results will be addressed during a webinar at the beginning of 2018, dealing with:

  • Investigate the main role of FTP in emerging market institutions and its expected path of development;
  • Understand the challenges faced in emerging markets in terms of market liquidity and balance sheet composition;
  • Explore the approaches used for FTP modelling, in particular for customer deposits and other products subject to behavioural dynamics;
  • Learn how robust IT solutions are a prerequisite for deploying a sophisticated FTP framework;
  • Discuss the next challenges that lie ahead in emerging markets in terms of FTP and integrated balance sheet management.