Internal Funds Transfer Pricing (FTP) in navigating challenging interest rates environment

September 2023

The financial industry is currently in the midst of an interest rate hike cycle that is not seen since 2008, amidst evolving market dynamics. Remarkably, there has also been a significant shift in the industry's focus towards liquidity risk management since 2010, receiving greater attention compared to the last interest rate hike.

While historically there has not been a specific period where these two forces coincided, the interactions between the interest rate environment and liquidity risk management became more apparent as banks are seeing challenges in their FTP practices.

Find out more about the major challenges observed in FTP practices and our take on key considerations of the future FTP recalibration for addressing these challenges.