The fundamental failing of the traditional transfer pricing regime - applying the arm's length standard to multinational banks based on a comparability analysis

Examines the fundamental concept of comparability that underpins the traditional arm's length methodologies required by the current transfer pricing regime. Contends that applying the concept of comparability to multinational banking transactions results in an economically flawed outcome. In this context, the two-step process suggested by the OECD to determine the allocation of profits to each part of a multinational bank is examined.