Financial intermediation

from lenders and then re-lending them to borrowers. The role of financial intermediaries in an economy, such as banks and building societies, is to provide means by which funds can be transferred from surplus units in the economy to deficit units. Surplus units are those economical agents, which have more money, than they need for their immediate needs. Deficit units are those, which have less money, than they need in order to fund their current activity. Financial intermediaries help to reconcile different requirements of borrowers and lenders. They provide obvious and convenient ways in wh