Intermediation

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January 1, 1 6 min read Definitions

Intermediation Financial Intermediaries Banks Savings and Loan Associations Economic Growth Resource Allocation

Intermediation refers to the process where financial intermediaries, such as banks or savings and loan associations (S&Ls), facilitate the flow of funds between savers and borrowers. This process enables the efficient allocation of resources and supports economic growth by providing a mechanism for savers to earn a return on their funds and borrowers to access the capital they need.