Editing Financial intermediary (section)

==Economic function==
{{Main|Financial system}}
{{See also|Financial services|financial market|Circular flow of income|Finance#The financial system}}
Financial intermediaries, as outlined, essentially, channel funds from those who have surplus capital ([[saving|savers]]) to those who require liquid funds to carry out a desired activity ([[investment|investors]]).<ref>[http://www.financeinformer.com.au/the-role-of-financial-intermediaries "The Role Of Financial Intermediaries"] {{Webarchive|url=https://archive.today/20150416230828/http://www.financeinformer.com.au/the-role-of-financial-intermediaries |date=2015-04-16 }}, Finance Informer website, Australia (accessed 10 June 2015)</ref> 
<ref>{{cite book
  | last1 = O'Sullivan
  | first1 = Arthur
  | authorlink = Arthur O'Sullivan (economist)
  | first2 = Steven M. | last2 = Sheffrin
  | title = Economics: Principles in Action
  | url = https://archive.org/details/economicsprincip00osul
  | url-access = limited
  | publisher = Pearson Prentice Hall
  | year = 2003
  | location = Upper Saddle River, New Jersey 07458
  | page = [https://archive.org/details/economicsprincip00osul/page/n288 272]
  | isbn = 0-13-063085-3}}</ref>
Financial intermediaries thus ''reallocate'' otherwise uninvested capital to productive enterprises.
<ref>Infinite Financial Intermediation, 50 Wake Forest Law Review 643 (2015), available at:  http://ssrn.com/abstract=2711379</ref><ref name="Siklos2001">{{cite book
  | last = Siklos
  | first = Pierre
  | authorlink = 
  | title = Money, Banking, and Financial Institutions: Canada in the Global Environment
  | publisher = McGraw-Hill Ryerson
  | year = 2001 
  | location = Toronto
  | page = 35
  | url = 
  | doi = 
  | id = 
  | isbn = 0-07-087158-2}}</ref>

In doing so, they  offer the  benefits of maturity and [[risk transformation]]. In other words, through the process of financial intermediation, [[assets]] or [[liability (financial accounting)|liabilities]] may be transformed into assets or liabilities with (very) different risk and payment profiles.<ref name="Siklos2001" />
*In the personal finance context, the instrument in question will be in the form of a [[loan]] or a [[mortgage loan|mortgage]].<ref>Robert E. Wright and Vincenzo Quadrini. Money and Banking: Chapter 2 Section 5: Financial Intermediaries.[http://www.saylor.org/site/wp-content/uploads/2012/06/ECON302-1.2-1st.pdf] Accessed June 28, 2012</ref>
*In the [[corporate finance|corporate context]], the form may be take any variety of debt, [[equity (finance)|equity]], or hybrid stakeholding structures, extending to [[private equity]] and [[venture capital]] investments. 
*Even in the non-commercial context of [[project finance]], [[Climate Finance|climate finance]] and [[Development finance institution|development finance]], financial intermediaries generally will be from the [[private sector]].<ref name="Financial Intermediaries">Institute for Policy Studies(2013), "[http://climatemarkets.org/glossary/financial-intermediaries.html Financial Intermediaries]", A Glossary of Climate Finance Terms, IPS, Washington DC</ref><ref>Eurodad (2012), "[http://eurodad.org/1540077/ Investing in financial intermediaries: a way to fill the gaps in public climate finance?]", Eurodad, Brussels</ref>
<ref>{{cite news |last1=Anton |first1=John |title=Investissement scpi |url=https://comparatif-scpi.fr |access-date=30 July 2022}}</ref>
The prevalence of these intermediaries, relative to disintermediated transactions, is explained in that specialist financial intermediaries ostensibly [[theory of the firm|enjoy a cost advantage]] in offering financial services; this not only enables them to make profit, but also raises the overall efficiency of the economy. Their existence and services are then explained by the [[information asymmetry|"information problems"]] associated with financial markets.<ref>{{Cite journal
 | last=Gahir
 | first=Bruce
 | title=Financial Intermediation
 | place=Prague, Czech Republic
 | year=2009
 }}</ref>