TL;DR - Financial intermediation has evolved from a bank-centered system to a more complex and specialized arena.
Helpfulness - 3
Tags - banks, recession, credit intermediation chain
- What is the “new” state of financial intermediation?
- Recessions commonly result in part from disruptions to financial intermediary activity.
- Intermediation has transitioned from a bank-centered system to a decentralized system, with non-bank institutions playing a large role (credit intermediation chain).
- Decentralization of intermediation opens up opportunities for economies of specialization, while traditional banks may have a diminished role.
- Banks have shown a remarkable capacity to adapt to the evolving system of intermediation (integrating non-bank entities).
Follow up links:
- Financial intermediation, https://www.investopedia.com/terms/f/financialintermediary.asp
- Financial Intermediation role in Great Recession, https://www.investopedia.com/terms/f/financialintermediary.asp