Contractual Intermediary

Contractual Intermediary

Holder of an indirect claim through a legal agreement that specifies that the individual must make periodic, fixed payments to the intermediary in exchange for the right to receive payments from the intermediary in the future.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Contractual Intermediary

A financial institution that stands between counterparties in a transaction. For example, in the sale of a house, a bank usually serves as a contractual intermediary by providing a mortgage to the homebuyer. In some non-traditional transactions, a bank may 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, including intermediaries. See also: Murabaha.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved