Using Fund Transfer Pricing as a Performance Measurement System in the Financial Service Industry
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Published:2019-12-31
Issue:
Volume:2
Page:13-30
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ISSN:2209-038X
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Container-title:Management Accounting Frontiers
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language:
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Short-container-title:MAF
Author:
Bicudo de Castro Vincent, ,Leote Tiago,Safari Maryam, ,
Abstract
As a response to the financial crisis of 2007-2008, financial service industry regulators have commonly requested financial service industry to implement fund transfer pricing (FTP) mechanisms. Despite the importance of the topic as highlighted in the practitioners’ literature since the 2000s, the use of FTP as a performance measurement system has been understudied. To add to our understanding of such mechanisms in the financial service industry, this paper demonstrates, through an analytical model, how FTP can be used as a performance measurement system in financial institutions. More importantly, this paper illustrates how FTP can be used for overcoming the distortions caused due to the transfer of funds between the business units.
Publisher
Institute of Certified Management Accountants Inc.
Cited by
1 articles.
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