Financial intermediaries Who are the financial intermediaries? A financial intermediary is a institution or an individual that serve as a middleman among drivers parties in order to facilitate financial transactions Common type of financial interme diaries § Commercial banks § Investment banks § Stock brokers § Pooled investment funds § Stock exchanges § Personal funds § Building society § Stock exchange § Credit unions Role of f inancial Intermediaries Financial intermediaries provide facilitate & financial instruments to transfer funds from surplus units or lenders to deficit units or borrowers in the business, personal, overseas & government sector. Clear or retail banks provide banking services to the public. Investment bank or “merchant bank” provide advice & major finance to corporate clients. Reducing risk through diversification.