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 intermediaries  

§  Commercial banks
§  Investment banks
§  Stock brokers
§  Pooled investment funds
§  Stock exchanges
§  Personal funds
§  Building society
§  Stock exchange
§  Credit unions 


Role of financial 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.
  •           Reducing cost of contracting & information processing.
  •           Providing a payment mechanism.  


Advantages of financial intermediaries


When considering financial intermediaries people and corporate clients can take following advantages from intermediaries 

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