Transfer Pricing for Financial Institutions book cover

Transfer Pricing for Financial Institutions

Establishing and maintaining effective transfer pricing policies is a key challenge in today's increasingly competitive international financial services sector. There are numerous issues involved, from the requirements of shareholders and risk management to the allocation of capital. There are also many different techniques for establishing efficient transfer pricing systems within an organisation.

This illuminating handbook provides a thorough introduction to transfer pricing and its uses within financial organisations, as well as a clear analysis of all the issues involved. Transfer pricing is so complex and variable that there can be no definitive blueprint for success: however, in this book John Smullen has provided a vital contribution to the debate and a much-needed clarification of this important topic.

Some of the areas covered:

  • What transfer pricing is and why it is used
  • Why transfer prices are so appropriate for financial institutions
  • Why each organisation needs to approach the introduction of transfer prices differently
  • How transfer pricing works in commercial organisations
  • The different types of transfer price
  • Specific analysis of the transfer pricing of funds, capital and derivatives
  • How to evaluate risk adjusted performance measures
  • The complexities of estimating marginal costs and revenues
  • A framework for understanding the motivation of shareholders, managers and regulators
  • How transfer pricing works as part of management information strategy
This lucid and authoritative handbook will help you to:
  • Understand the different techniques used in transfer pricing
  • Establish transfer prices in line with your organisation's strategy and objectives
  • Make sound decisions, minimise risk and achieve better outcomes
This is a book for people involved in raising and loaning funds in today's global markets who wants to understand the issues involved in transfer pricing and the techniques required. It will be used by banking, investment, insurance and other financial organisations worldwide.

Paperback, 160 Pages

Published: July 2001

Imprint: Woodhead Publishing

ISBN: 978-1-85573-372-5

Contents

  • Part 1 An introduction to transfer pricing in financial institutions: What is transfer pricing? The general theory of transfer pricing; Transfer pricing in commercial organisations; The uses of transfer pricing in financial organisations. Part 2 Setting transfer pricing in financial organisations: Integrating transfer prices with organisational structure; Attitudes to risk. Part 3 Specific transfer prices: Transfer prices based on operating expenses; Transfer pricing the costs of funds: A general perspective; The transfer price of funds: Some perspectives on wholesale and retail funding; The transfer pricing of capital; Risk adjusted performance measures: The transfer price of investment portfolios; Risk adjusted performance measures: Return on risk adjusted capital and associated measures; Risk adjusted performance measures: A critical overview; The transfer pricing of derivatives. Part 4 The strategic perspective: Optimal bank modelling for transfer pricing; Transfer pricing and management information strategy; Issues and conclusions.

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