Before we launch into the heart of the current topic involving usage of Funds Transfer Pricing, let me take you through a very brief introduction.  Figure 1 below depicts one of the simplest forms of a hypothetical FTP scenario of a bank operating with just a single (2%) deposit on the liabilities side and a […]

It is customary for financial organizations / banks to indulge in a little window shopping on a weekly basis by calling or surfing the websites of their close competitors to get at the current rates being paid by them on different classes of deposits and loans. This gives them a good idea of the current […]

A bank uses its customers’ funds to earn a profit for itself by advancing, loaning monies for varying purposes to individuals, organizations, corporations etc. It may also invest in securities, bonds, facilities, people, mortgaged properties, technologies etc.  For a bank, its profit will depend on receiving money at low rates of interest and investing them at […]

Definition of ALM Asset and Liability Management (ALM) is a process of managing an organization’s assets and liabilities with the objective of earning an adequate return on capital employed. First, since ALM is essentially a process, even having the best model and the resources to run it will not meet with much success unless the […]