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Using fund transfer pricing for comparing financial performance among business units

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journal contribution
posted on 2014-01-01, 00:00 authored by Vincent Bicudo de CastroVincent Bicudo de Castro
This study aims to demonstrate by a simplified analysis how fund transfer pricing can be used to measure financial performance taking into account the flow of resources in a bank with only two branches. The present study was developed in three sections. The first section provides information regarding fund transfer pricing and its characteristics. This is followed by a section with an analysis demonstrating how fund transfer pricing can assist top management to evaluate financial performance in a financial institutions with only two business units. Finally, the third section has the concluding remarks about the benefits and limitations of the use of fund transfer pricing. This study uses a simple version of fund transfer pricing system to address a further complex problem which is the exchange of services among business units in a decentralized organization. The analysis has shown how fund transfer pricing can be used to manage a bank, directing the efforts of branch managers.

History

Journal

Journal of performance management

Volume

25

Issue

3

Pagination

11 - 21

Publisher

Association for Management Information in Financial Services

Location

Atlanta, Ga.

ISSN

1949-971X

Language

eng

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2014, Association for Management Information in Financial Services

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