Definition
- Financial intermediary
- A financial intermediary is an institution, like a bank, that receives money from savers and provides funds to borrowers.
- Not to be confused with: Depository institution
- A depository institution is an institution that accepts money deposits and then uses these to make loans.
Test yourself
What is the difference between financial intermediary and depository institution?
A depository institution such as a commercial bank or building society is one kind of financial intermediary; insurers and pension funds are intermediaries that do not take deposits.