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Financial Intermediaries: An Introductory Guide to Understand Its Meaning and Role , Dec 2019

By : Julia Zoukhri Posted December 27, 2019 Reading Time: 2 minutes
No. of views: 129

The financial intermediaries are the small entities that facilitate monetary transactions. These have emerged as one of the most useful institutions that run the entire market system efficiently. One can easily channelize the saving amount into the investments. Some of the important examples of financial intermediaries are: Banks, Mutual Funds, Credit Union, Financial Advisors, insurance companies and other financial institutions. The students who are not completely familiar with the financial intermediaries can hire finance assignment help from the best Australian writers experts of BookMyEssay.

Role of Financial Intermediaries

The major role of financial intermediaries is to convert the savings into investments. It provides storage facilities for both cash and other important liquidity assets. Banks are one superior example of financial intermediaries. They are licensed to accept deposits, provide loans and other important financial facilities to the public. The banks play a major role in stabilizing the economy of the country. They are liable to face heavy regulations.

Another important function of these intermediaries is to assist the clients to earn more money by giving the right investment options. The mutual funds and investment banks keep coming up with the new investment opportunities to help their clients maximize the returns. The investment products offered by these intermediaries involve less risk.

Advantages of Financial Intermediaries

By leveraging the financial intermediaries people can pool their money. This enables them to make large investments. This also offers benefits to the entities in which they are investing. At the same time, financial intermediaries pool risk by spreading funds across a diverse range of investments and loans. Loans benefit households and countries by enabling them to spend more money than they have at the current time.

This helps in saving a lot of time and cost. The financial intermediaries help in neglecting the risk of individuals with extra cash by rolling out the risk. They lend money to several people. In addition to this, they are also responsible for thoroughly screening the borrower. These institutions process and accumulate information without any hassle. This ultimately results in lowering the default risks involved in the entire process.

Conclusion

With this information, we can conclude that financial intermediaries play a vital role in the world economy at the present time. The financial intermediaries also contribute to the economic development of the country by helping the government to eliminate poverty. They also implement other social programs. If you want to acquire extensive details about any topic related to this then you can hire assignment and homework writing services from the experts of BookMyEssay. So, don’t wait and contact them today!