vings and loans and saves transaction costs by providing an appropriate definition and level of quality.The second function of financial intermediaries is the transformation of the assets they acquire. They transform maturities, size and risks of these assets. For a single lender or borrower, it would be very time-consuming to find an appropriate partner who wants to give a loan in the amount and time-horizon desired by him. A financial intermediary can transform the maturities and the size of savings or loans by pooling them.E.g., he can finance one large long-term loan by revolving many small short-term loans.РIntermediaries support the matching of lenders and borrowers of all types by supplying a centralized market for them. The ability of intermediaries to match apparently inconsistent
全文预览
