Financial intermediary
From Wikipedia, the free encyclopedia
The term financial intermediary may refer to an institution, firm or individual who performs intermediation between two or more parties in a financial context. Typically the first party is a provider of a product or service and the second party is a consumer or customer.
In the U.S., a financial intermediary is typically an institution that facilitates the channelling 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. Alternatively, they may lend the money directly via the financial markets which is known as financial disintermediation.
[edit] Types of financial intermediary
Financial intermediaries can be:
- Banks;
- Building Societies;
- Credit Unions;
- Financial adviser or broker;
- Insurance Companies;
- Life Insurance Companies;
- Mutual Funds; or
- Pension Funds.
