Definition of Financial intermediary:
Financial institution (such as a bank, credit union, finance company, insurance company, stock exchange, brokerage company) which acts as the middleman between those who want to lend and those who want to borrow.
A financial intermediary is an entity that acts as the middleman between two parties in a financial transaction, such as a commercial bank, investment bank, mutual fund, or pension fund. Financial intermediaries offer a number of benefits to the average consumer, including safety, liquidity, and economies of scale involved in banking and asset management. Although in certain areas, such as investing, advances in technology threaten to eliminate the financial intermediary, disintermediation is much less of a threat in other areas of finance, including banking and insurance.
An institution, such as a bank, building society, or unit-trust company, that holds funds from lenders in order to make loans to borrowers.
A non-bank financial intermediary does not accept deposits from the general public. The intermediary may provide factoring, leasing, insurance plans or other financial services. Many intermediaries take part in securities exchanges and utilize long-term plans for managing and growing their funds. The overall economic stability of a country may be shown through the activities of financial intermediaries and the growth of the financial services industry.
How to use Financial intermediary in a sentence?
- These intermediaries help create efficient markets and lower the cost of doing business.
- To do this, it enters into a forward contract with a financial intermediary (usually a commercial bank) which now assumes the foreign exchange risk for a commission.
- You should only deal with a financial intermediary that you trust so that you know that your money is in safe hands.
- You should trust anyone that you put into the role of financial intermediary so that they do not rip you off.
- Financial intermediaries serve as middlemen for financial transactions, generally between banks or funds.
- Financial intermediaries offer the benefit of pooling risk, reducing cost, and providing economies of scale, among others.
- Intermediaries can provide leasing or factoring services, but do not accept deposits from the public.
- The car dealership secured one million dollars from their financial intermediary , along with a set of lending qualifications, to make their end of the year blow out feasible for customers relying on financing their new car.
Meaning of Financial intermediary & Financial intermediary Definition