Commercial Bank Funds Transfer Pricing (FTP) Research

Since20July2013, the People’s Bank of full liberalization of lending rates offinancial institutions regulation, which means that China has taken an important step inthe process of marketization of interest rates. After the interest rate market, commercialbanks have more self-pricing, but also means that the fixed deposit interest rate marketspreads disappeared, for the enjoyment of the bonus system has long been China’scommercial banks is undoubtedly a major impact. One moves, China’s commercialbanks must seek the management of major reform.1980s, Bank of America will be the first to introduce the concept of internal fundstransfer pricing management of commercial banks, after30years of rapid development,the internal funds transfer pricing plays an important role in the management ofcommercial banks. Combination of capital constraints and interest rate marketbackdrop, China’s commercial banks need to establish internal funds transfer pricingsystem, however, the internal funds transfer pricing system in China’s commercialbanks is still in its infancy.Based on the above background, the first sort of internal funds transfer pricingconcept, introduced the merits of the four roles of the internal funds transfer pricingand the three modes and pricing methods, comparison between the modes, combinedwith the Western mainstream application model and the reality of China, Analysisfocused on duration matching method and duration matching curves constructed. AndCITIC Bank, for example, details of CITIC Bank to establish internal funds transferpricing system process, analyze CITIC Bank to establish the effectiveness and lack ofinternal funds transfer pricing. Finally, from the overall point of view, the analysisapplication status in our internal funds transfer pricing, constraints.Finally, this paper analyzes the results of the full text of that country’s commercialbanks should establish a commercial bank’s internal funds transfer pricing systemimmediately. From the perspective of commercial banks and regulators angles policyrecommendations for the establishment of internal funds transfer pricing.