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Financial Intermediary Essay Topics & Paper Examples

Financial Intermediary

A financial intermediary is an organization that raises money from investors and provides financing for individuals, companies and other organizations. A financial intermediary is typically an institution that facilitates the channeling of funds between lenders and borrowers indirectly. That is, savers (lenders) give funds to an intermediary institution (such as banks), and then that institution in turn gives those funds to spenders (borrowers). This may be in the form of loans or mortgages. For corporations, intermediaries are important sources of financing. Intermediaries are a stop on the road between savings and real investments. The financial intermediaries in turn raise funds, often in small amounts, from individual households. Two important classes of financial intermediaries include mutual funds and pension funds along…