financial risk fitness gmbh

Landsberger Straße 98 - D-80339 Munich
Phone +49 89 46139112 - www.financial-risk-fitness.com

Establishment of Group Funds Transfer Pricing Policies and Strategic Organization of the Group´s Funding Center

Prior to engaging financial risk fitness for a competitive benchmark analysis and strategic advice, the banking group operated under multiple funding centers – all embedded into the treasury and capital markets division. As such multiple conflicts were “pre-programmed”, as most economic entities whose P&L were dependent upon the funds transfer prices were complaining of receiving inadequate rates to their economic disadvantage and to the advantage of the global markets division. Above and beyond, the bank did not have a unique Group strategy relating to funding in the interbank markets and often was subjected to arbitrage by competitors.

financial risk fitness presented a competitive benchmarking analysis drawing on their world-wide knowledge of the functional and organizational landscapes of ALM activities of major international banks.

The Bank´s executive committee further requested that frf draw a restructuring of the bank´s funding center aiming to centralizing liquidity funding and eliminating sub-optimalities, along with the design of an adequate funds transfer pricing system.

As a result of a three months project, frf presented the bank´s executive committee (and the board of directors) with a comprehensive study that is currently under implementation and has already positioned the bank as a peer leader among their competitors.