Source - https://www.jstor.org/stable/pdf/3874817.pdf?refreqid=excelsior%3A440093d39d4b5265e6ddef572125eca7
TL;DR - Financial intermediaries pool capital to make loans and are an indicator of a relatively developed economy.
Helpfulness - 5
Tags - financial intermediation, pooling, joint-stock companies, mutual funds,
Questions answered:
- What do financial intermediaries do?
- How did joint-stock companies operate as financial intermediaries?
Summary:
- Financial system prompts the pooling of capital to fund efficient-scaled enterprises.
- Financial intermediaries collect capital, pool, and use funds to make loans (710).
- Intermediaries that provide equity capital are known as venture capitalists.
- Joint-stock companies pooled capital to fund expeditions acted as financial intermediaries.
- The presence of financial intermediation is an indicator of how developed an economy is.
- Mutual funds are the modem analogue of the older joint-stock companies that financed various types of projects.
Follow up links:
- Joint-stock company, https://www.investopedia.com/terms/j/jointstockcompany.asp
- Financial intermediation, https://www.investopedia.com/terms/f/financialintermediary.asp