intermediation (redirected from intermediate)

Intermediation

Investment through a financial institution. Related: Disintermediation.

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intermediation

The flow of funds through financial intermediaries (such as banks and thrifts) on its way to borrowers. Money deposited at financial institutions that make the money available to corporate borrowers is an example of intermediation. This process tends to facilitate saving and investing in sophisticated financial systems. Compare disintermediation.

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Intermediation

A situation in which a financial institution stands between counterparties in a transaction. For example, in the sale of a house, a bank usually serves as a financial intermediary by providing a mortgage to the buyer to pay the seller. In some non-traditional transactions, a bankmay buy a product (e.g. corn) and immediately re-sell it for a profit to a third party. Most transactions requiring a loan to one of the parties include intermediation. See also: Murabaha.

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intermediation

The normal flow of money into financial institutions in the form of deposits,which are then loaned out to earn income.Contrast with disintermediation,which occurs when depositors take their money out of financial institutions because they can earn more money,relatively risk free, in other investments.