disintermediation

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Related to disintermediated: Reintermediation

Disintermediation

Withdrawal of funds from a financial_institution in order to invest them directly.

Disintermediation

The act of making a withdrawal from a bank or other financial institution in order to use the funds for investment purposes. For example, one may withdraw $10,000 from his savings account in order to buy a stock without the bank's intermediation. This has become less common with deregulation of banking because more banks can offer investment services, reducing the incentive to withdraw.

disintermediation

The withdrawal of funds from financial intermediaries such as banks, thrifts, and life insurance companies in order to invest directly with ultimate users. Disintermediation was more of a problem when financial intermediaries were limited in the returns they could pay to savers. Deregulation of financial intermediaries was intended to dampen the periodic swings toward disintermediation. Compare intermediation.

disintermediation

a situation where a FINANCIAL INTERMEDIARY such as a BUILDING SOCIETY is forced to reduce its lending operations because of the withdrawal of deposits from it and because it is unable to attract new funds. Disintermediation usually occurs (and then only temporarily) when an intermediary (see INTERMEDIATION) fails to adjust its borrowing rates on deposits promptly when interest rates rise, so its rates are insufficiently competitive vis-à-vis other deposit-taking institutions.

disintermediation

The situation that exists when depositors withdraw their savings from financial institutions and invest the money directly in the marketplace,usually because they can obtain a higher yield even though also running a higher risk of losing their money.

References in periodicals archive ?
Video Games in the Cloud: A disintermediated video game industry
As long as Li & Fung sticks to its core areas, it can't be disintermediated, says Fung, and its work with Coca-Cola shows how it has used the Internet to consolidate its position.
What Ron has done is he's disintermediated, or eliminated, the editor.
There is a school of thought that says that risk managers are a dying breed; that along with insurers, who will be elbowed out of their own business by banks, and brokers, who will be disintermediated by the Internet, risk managers will see their responsibilities siphoned off by a chief risk officer who comes from the financial side of the house.
So why concentrate on the channel in a disintermediated world?
They have disintermediated the complex prepaid distribution system to increase the control financial institutions have over their programs, while still delivering flexible and innovative prepaid offerings.
Given that building a delivery network yourself is impractical and no one wants to be disintermediated, retailers will benefit from working with a partner like Deliv who is solely focused on this specific business.
Atkinson of the Progressive Policy Institute think tank in Washington calls this latter group "the disintermediated.
Welcome to the brave, new, disintermediated world of the electronic marketplace.
Banks must innovate or be disintermediated out of existence," said King.
While the transactional side of the securities business has become disintermediated, individuals are in more need than ever for high quality education and technology tools capable of keeping up with the advances in computer-assisted trading.
The major implication for the travel industry is that WorldMate has disintermediated search.