Corporate treasuries use Liquidity Transfer Pricing (LTP) to allocate internal liquidity costs and benefits across different business divisions within a financial institution.

[Deposits Division] ---> Generates stable liquidity ---> [Treasury Center] ---> Funds assets ---> [Lending Division]
  (Receives an internal funding credit)                                         (Charged an internal liquidity cost)

LTP functions as an internal pricing system that aligns employee incentives with liquidity risk realities. By charging lending divisions for the long-term liquidity needed to fund their loans and crediting deposit divisions for gathering stable customer deposits, the treasury can optimize balance sheet structures and prevent hidden liquidity concentrations.