A Research Of Funds Transfer Pricing Of Commercial Bank Of China

Funds Transfer Pricing (FTP) system is widely accepted as an advanced mode of commercial bank's internal capital management. So far, most advanced commercial banks in the world have established their consummate Funds Transfer Pricing system. A reasonable and effective Funds Transfer Pricing system will not only help commercial banks to separate interest rate risk, concentrating the interest rate risk to the specialized risk manage department, but also improve commercial bank's product pricing power. In addition, the Funds Transfer Pricing system can set up a unified and objective data platform for commercial bank, which is a strong support for commercial bank to optimize their resource allocation and to maximum the benefit.Along with the development of interest-rate-marketing in our country and the increased competition in the financial sector, commercial banks of China face more and more severe challenges. At this point, the traditional system of internal financial management in commercial bank of china increasingly shows its inherent disadvantages. Therefore, learning advanced management experience of advanced commercial banks, establishing a modern and appropriate Funds Transfer Pricing (FTP) system, are very important to commercial banks of china.This article starts from the theoretical knowledge of funds transfer pricing system of commercial bank, including the funds transfer pricing model theory, operational processes, and the construction method. Then the article make a case study on a Chinese commercial bank's Funds Transfer Pricing model, including an empirical research of the FTP model's separation effect to interest rate risk, the building process of FTP curve under the FTP modal, the commercial bank's pricing methods and pricing results of the financial products under the FTP modal, and then the article analyzes the shortcomings of FTP model. Finally, the article provides some suggestions that could optimize the Funds Transfer Pricing model in Chinese commercial banks.Most of the research on Funds Transfer Pricing model in China is qualitative research, lacking of empirical testing, and the research content just focus on the introduction to foreign practices, lacking of the analysis to the actual operation of Chinese commercial banks. The Characteristic of this article is that based on the theoretical analysis of funds transfer pricing modal, the author combine the theoretical research of funds transfer pricing system and the research of actual operation of commercial bank together, and then provide some suggestion of optimizing the Funds Transfer Pricing system to commercial banks of china.