What does the term financial intermediaries mean?
Corporations that receive savings and investment funds from individuals and invest them in capital market securities. Types of financial intermediary Financial intermediaries include: * Banks * Building societies * Credit unions * Financial advisers or brokers * Insurance companies * Collective investment schemes * Pension funds Financial intermediaries perform five major functions[4]: (1) they facilitate the acquisition of payment for goods and services, e.g. through the use of cheques; (2) the financial system provides economies of scale and economies of scope that allow an individual to invest in a portfolio of assets, which would be much more difficult in the absence of financial intermediaries; (3) they ease the liquidity constraint on households and firms which arises when the liquidity available for certain purchases is at variance with the immediate flow of income available; e.g. the use of mortgages allows households to purchase homes today instead of thirty years from now whe
