Promote a stable system of financial intermediation, efficient and competitive.
Normally , financial intermediation is a wonderful thing; but now and then, disaster strikes.
In short, financial intermediation carries with it the risk of bank runs, of self-fulfilling panic.
Firstly, as we have already commented, economies of scale are present in all financial intermediation.
However, these come in various forms, only one of which strictly involves financial intermediation.
Hopefully, the reader has now a sound understanding of money, banks and financial intermediation.
Apart from providing a mechanism for the transmission of payments, the other important role of the banks is to provide financial intermediation.
As financial intermediation grew in complexity and sophistication in the 1980s and 1990s, it became more so.
And they increased the scale and scope of domestic financial intermediation in order to reduce their vulnerability to external storms.
The meaning of the term financial capitalism goes beyond the importance of financial intermediation in the modern capitalist economy.