Liquidity regulation forces transfer pricing models rethink

liquidity ratio

Regulatory change is forcing banks to overhaul their internal transfer pricing models, leading to higher costs for individual business lines that are likely to be passed on to customers.

"Banks are constantly refining how they allocate the cost of capital and balance sheet to each of their businesses. In the short term, this may lead to inconsistencies between banks, but I do believe regulation will encourage banks very quickly to arrive at the same place," says Richard Armes, co-head of

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