Funds Transfer Pricing moves the cost and value of funding from the balance sheet to the businesses that create it. Lending desks pay an internal rate for the money they lend, and deposit gathering desks earn an internal rate for the funding they bring in.
Done well, FTP makes each product's true profitability visible, prices in liquidity and term risk, and steers behaviour toward the funding mix the bank wants. It is central to how treasury influences the wider bank.
