Funds Transfer Pricing (FTP) is an essential part of every bank’s liquidity risk management framework – the PRA considers the FTP mechanism to be a vital part of the ILAAP liquidity risk review and approval process. This recognises that FTP is an important part of the risk management process, assisting in understanding the profitability of customers, product lines and organisational units within a bank.


This one-day workshop provides comprehensive coverage of business best-practice approach to the bank internal funds pricing framework. It explains the process and implementation of the FTP mechanism in clear and practical terms, to enable delegates to acquire an understanding of best-practice FTP principles, and how they can be integrated into ALM policies, thus optimising the bank’s liquidity management framework.

A well-designed FTP framework enables a bank to pursue its strategic objectives, conversely a poorly implemented FTP framework can lead to long-term damage to a bank’s balance sheet structure and liquidity position.


By the end of this workshop you will be able to:

  • Understand the value and importance of an effective FTP mechanism
  • Explain at ALCO and Board level the need to have a robust FTP process in place at the bank
  • Observe the interaction of business lines, Treasury, Risk and Finance within the FTP process
  • Implement a best-practice FTP regime and funding policy in your bank
  • Construct your bank’s FTP funding curve efficiently

Who should attend?

The workshop is aimed at senior or experienced Treasury, Risk, Finance and Business Line practitioners, and covers the complete spectrum from governance and internal funding policy to risk measurement and returns analysis. Delegates take part in Group Exercises that aim to demonstrate the FTP mechanism in a practical, observable context.

Treasury Senior Management, CFO and team, CRO and team, Heads of ALM/ Money Markets, ALCO membership, Business line heads, Heads of Balance Sheet Management, Risk Management, Liquidity Management, Heads of Funds Transfer Pricing, Finance Senior Management


The concept of bank funds transfer pricing

  • An effective internal funding framework

Objectives of internal funding policy

  • Consistent liquidity pricing behaviour amongst business lines
  • Removing interest-rate risk from the business lines
  • Including the bank’s cost of liquidity in product pricing
  • The correct internal pricing regime for the bank

The cost of funds

  • Constructing the bank’s internal funding curve
  • Different reference funding curves (Libor, OIS, ASW)
  • Marginal unsecured curve
  • Weighted average cost of funds (WACF) curve

FTP and liquidity management

  • Pricing liquidity via the FTP process
  • The concept of the term liquidity premium (TLP)

Treasury op model, FTP and balance sheet management

  • Integrating FTP into balance sheet management
  • FTP centre as cost centre or profit centre
  • FTP across different business lines: alternative approaches

FTP and liability strategy

  • Integrating FTP strategy into ALM and liability strategy
  • Driving liabilities-raising behaviour through the FTP mechanism
  • A dynamic FTP regime for changing yield curve environments

Funding policies

  • Banking book
  • Trading book
  • Derivatives


Professor Moorad Choudhry lectures on the MSc Finance programme at University of Kent Business School. He has 29 years experience in banking in the City of London and was latterly Treasurer, Corporate Banking Division at The Royal Bank of Scotland. He is author of The Principles of Banking.


Take this training in-house

If you have five or more delegates who wish to attend this briefing, it may be more cost effective to run it in-company. To find out more about in-company training, please contact Philip Allen Director of Learning on 0207 216 8843 or

Funds Transfer Pricing and Bank Asset Liability Management
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Workshop Details

UK Finance, 5th Floor
1 Angel Court,
London, EC2R 7HJ
Time: 09:00 - 17:00

Start Date: 6th June 2019
End Date: 6th June 2019


£650 (+VAT) – Members
£800 (+VAT) – Non-members