disintermediation


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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.

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As John Battelle pointed out in an article this month in Advertising Age's Point supplement, disintermediation isn't necessarily the elimination of the middleman by the Internet or MIS or some other high-tech interloper.
Accordingly, it might be more accurate to refer to disintermediation as reintermediation.
By examining traditional functions provided by intermediaries in sales transactions, we intend to demonstrate that current Internet trends go beyond disintermediation. Emerging new Internet players are being joined by entirely new types of intermediaries, leading to the radical restructuring of industrial and commercial networks.
These two issues, which are discussed in this section, are disintermediation and customer orientation.
In the e-commerce world, the practice of disintermediation has helped to spur exponential growth in many industries.
And if you're already a star, you can avoid the middleman by using the Net to keep most of the money yourself." It's hardly surprising that Time, as a huge-circulation cash cow of a giant corporation, casts the promise of disintermediation starkly in terms of stardom and big bucks, rather than anything as impecunious as, say, self-expression.
In its new manifestation, disintermediation covers a lot of ground.
The Single Market, disintermediation, electronic technology and the advent of the Euro have all accelerated the banks' transitions.
These factors are associated with disintermediation (interest rates, economic, and employment conditions), returns on insurer investments (bonds, stocks, and real estate), and competition.
"We've heard a lot about channel disintermediation over the last few years, but from talking to our customers, we think the pendulum's coming back a little bit the other way," explained president and CEO Jean Kovacs.
Hence, while exploring the roles that transaction intermediaries play in electronic commerce may assist in identifying and remedying the sources of disintermediation of the tax system that may arise from electronic commerce, Revenue Canada and the Department of Finance should exercise restraint in proposing or imposing new compliance and reporting requirements on intermediaries.
Technological substitution, disintermediation, and convergence are three factors that will have an obvious impact on tax practice.