PadhaiBy Astra Cloud
Search notes and questions
Ask a doubtProgramsNoticesGPA calculatorMy studyClassroom

Tribhuvan University

BSc CSITBachelor of Science in Computer Science and Information TechnologyBCABachelor of Computer ApplicationBITBachelor of Information TechnologyBIMBachelor of Information ManagementBBABachelor of Business AdministrationBBSBachelor of Business StudiesBBMBachelor of Business ManagementBITMBachelor of Information Technology Management

Pokhara University

BE Computer (PU)Bachelor of Engineering in Computer EngineeringBBA (PU)Bachelor of Business Administration (Pokhara University)

National Examinations Board (+2)

Class 10Class 10 (SEE)+2 Science+2 Science (Class 11 and 12)+2 Management+2 Management (Class 11 and 12)+2 Humanities+2 Humanities (Class 11 and 12)
All universities and programs

FIN255 Foundations Of Financial Institutions And Markets

Foundations Of Financial Institutions And MarketsTU Board 2076

What is financial intermediation?

1

Answer

· Based on the official syllabus and past papers
Updated

Financial intermediation refers to the process by which financial intermediaries, such as banks, insurance companies, pension funds, and investment firms, facilitate the transfer of funds from savers (those with surplus funds) to borrowers (those with a deficit of funds). These intermediaries play a crucial role in the financial system by:

  • Pooling resources: Aggregating small savings from numerous individuals to provide larger sums for investment or lending.
  • Risk management: Diversifying risks by lending to multiple borrowers or investing in various assets.
  • Liquidity provision: Offering liquidity to savers (e.g., through deposits) while providing long-term funds to borrowers (e.g., loans or bonds).
  • Information and monitoring: Reducing information asymmetry by evaluating borrowers' creditworthiness and monitoring their activities.

This process enhances economic efficiency by enabling efficient allocation of capital and promoting economic growth.

Discussion

Loading…

More Foundations Of Financial Institutions And Markets questions

Write about the non depository financial institution.TU Board 20812What do you mean by required reserve and excess reserve?TU Board 20812Suppose that real risk free rate is 3 percent, average inflation premium for five year is 7 percent. If maturity risk premium on 3 year security is 2 percent,…TU Board 20812A commercial bank has loans and advance of Rs 1,100 million, government security of Rs 200 million and cash in transit of Rs 50 million. What will be its risk…TU Board 20812What do you mean by social intermediation service of microfinance?TU Board 20812Write about any one principle of cooperatives.TU Board 20812

All Foundations Of Financial Institutions And Markets old questions