Financial Intermediation Service

Definition

Financial Intermediation Service is any Financial Service in which a third party (the intermediary) matches lenders and investors with entrepreneurs and other borrowers in need of capital.

Often investors and borrowers do not have precisely matching needs, and the intermediary's capital is put at risk to transform the credit risk and maturity of the liabilities to meet the needs of investors.

See Also

• Financial Product
• Office of Financial Research (OFR) Annual Report, 2012, Glossary