Business and Personal Finance Dictionary

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• FUNDS TRANSFER PRICING (FTP)
  
  An internal cost accounting system or methodology that transfers a cost of funds expense to profit centers that generate assets and a credit for funds to profit centers that provide funding. Most funds transfer pricing systems are matched maturity systems that attempt to reflect the term structure of interest rates in their transfer rates. Transfer rates may be allocated to pools of similar assets or liabilities, may be specifically allocated to individual assets or liabilities, or may employ a combination of those two approaches.
  
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