What is financial intermediation?

CPA-Financial-Management-Section-3 Revision kit

Financial intermediation
Financial markets promote savings and investment by providing mechanisms by which the financial requirements of lenders (suppliers of funds) and borrowers (users of funds) can be met. Financial institutions (such as pension funds, insurance companies, banks, building societies, unit trusts and specialist investment institutions). These collect funds from savers to lend to their corporate and other customers through the money and capital markets or directly through loans, leasing and other forms of financing.

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