Financial Intermediary

A financial intermediary is an entity that acts as a middleman between two parties in order to facilitate financial transactions. Financial intermediaries can be banks, insurance companies, mutual funds, pension funds, and other financial institutions. They provide services such as lending, investing, and managing funds for their clients. Financial intermediaries are important for the efficient functioning of the financial system, as they help to reduce the cost of transactions and provide liquidity to the markets.

History of Financial Intermediaries

Financial intermediaries have been around for centuries, with the earliest examples being merchant banks in the Middle Ages. These banks provided services such as lending, foreign exchange, and money transfers. In the 19th century, the banking system evolved to include commercial banks, which provided services such as deposit accounts and loans. In the 20th century, the financial system expanded to include a variety of financial intermediaries, such as mutual funds, pension funds, and insurance companies.

Comparison of Financial Intermediaries

Summary

Financial intermediaries are important for the efficient functioning of the financial system. They provide services such as lending, investing, and managing funds for their clients. Banks, insurance companies, mutual funds, and pension funds are all examples of financial intermediaries. For more information about financial intermediaries, visit the websites of the U.S. Securities and Exchange Commission, the Federal Reserve Bank, and the Financial Industry Regulatory Authority.

See Also

• Banking
• Insurance
• Mutual Funds
• Pension Funds
• Investment Management
• Portfolio Management
• Retirement Planning
• Foreign Exchange
• Money Transfers
• Securities and Exchange Commission

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