A financial institution that 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 homebuyer. In some non-traditional transactions, a
bank may buy a product, such as corn, and immediately re-sell it for a
profit to a third party. Most transactions requiring a loan to one of the parties include financial intermediaries. See also:
Murabaha.