lesson 2

• Financial intermediaries are intermediaries of financial services with the aim of making financial transactions safer and easier to access for clients.
• Financial intermediaries act as an intermediary between two parties when it comes to the settlement of financial transactions or financial business in general.
• Financial intermediaries offer their clients several advantages, such as security, access to and management of assets, and liquidity.
• Financial intermediaries channel or allocate funds from individuals or corporations with surplus capital to other individuals or corporations that require cash to carry out certain economic activities.
• Lending is the process by which a financial institution provides funds to a borrower.
• the institution typically receives interest in return for the loan.
• Lending in banking benefits lenders and borrowers alike by increasing liquidity within the marketplaces where loans are originated and used.
• The banking sector is one of the most important components of any economy and is a key driver of economic growth.
• One of the main functions that banks perform is providing loans to businesses and consumers, which help finance new investments and stimulate demand in the economy.
• benefit of lending in banking.

  Increased_economic_growth 

  More_jobs

  Improved_access_to_credit

  Reduced_borrowing_costs

  Improved_economic_stability
• Diversification is a risk management strategy that creates a mix of various investments within a portfolio.
• A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt to limit exposure to any single asset or risk.
• reduce risk through diversification: Intermediaries achieve this by pooling capital and spreading risk.
• Intermediaries collect deposits from agents wishing to invest money, and they subsequently make these funds available to agents seeking capital.