The Project Design For Interal Funds Transfer Pricing Of Rural Commercial Bank

In the 1960 s,in order to adapt to the rapid development of financial market,the United States gradually began to ease rate control of the interest rate,in that case,bank of America pioneered the use of internal funds transfer pricing(FTP)method to measure the cost of capital.And they have achieved good results.Financial market interest rate marketization reform of China starts relatively late,but in recent years,with the accelerating interest rate marketization,the central bank gave up the right of deciding the deposit and lending rates,domestic commercial Banks have the right to decide the rate of deposit and lending,in such a case,how to carry on the fine management of funds becomes very important for rural commercial bank.While internal funds transfer pricing play an important role in the management of funds in the modern commercial banks,it can achieve four sorts of functions:fair department performance,interest rate risk management,guide the product pricing and optimize the allocation of resources.The internal funds transfer pricing model of the term matching method is currently the most advanced and reasonable pricing method for International commercial Banks.On the choice of internal funds transfer mode,W.Randall Payant think deadline matching method is more suitable for the actual situation of Banks’ capital operation.Period at the heart of the matching method is determined according to the market yields FTP curve,you have to determine the price of the business internal capital transfer for each business respectively.Jennifer D.R ice,Mehmet C.K ocakulah(2003),Kafafian,RobertE(2001)points out that the FTP is a very important tool in bank industry,when the bank to develop a reasonable internal funds transfer pricing system,will help to improve risk monitoring and profitability of the bank.In the domestic establishment of internal transfer price,most of domestic scholars agree with the term matching method to match all of the assets and liabilities business,but the financial market is relatively backward in our country,the financial market lack of recognized market yield curve,the market rate of return can’t accurate response bank loan business opportunities for income and opportunity cost.Domestic scholars think that we can find an accepted a risk-free yield curve to build the FTP curve(such as Shanghai interbank lending rates),and then adjust the FTP yield curve,finally we can get the FTP final price.According to the design of commercial bank’s internal funds transfer pricing,I have summarized the general commercial bank’s internal funds transfer pricing methods,and tried to give some specific business internal price for the bank of jiangsu province.This article is divided into five parts altogether,the first part first introduced the research background and significance of the internal funds transfer pricing,and introduces the domestic and foreign literature review about the internal funds transfer pricing.The second part mainly introduces the internal funds transfer pricing method and the basic functions and the change it can bring to the bank.The third part is that according to the the internal funds transfer pricing design methods of other banks I have summarized the common methods to structure the internal funds transfer pricing curve,including building and adjustment method of internal funds transfer pricing curve.The fourth part is the core part of this paper,the design of a rural commercial bank’s internal funds transfer pricing.building the curve of deposit and lending price,and set up the adjustment of the item,and eventually give an internal transfer price for every business transaction of this rural commercial bank.The fifth part is the conclusion of this article.