Question

What are intermediaries? In which countries are intermediaries used?

Answer 1

Intermediaries are the entities that help bring buyers and sellers, depositors and borrowers and other players at one platform and act as network builder the bridge the gap between different parties. For example, banks act as intermediaries between depositors and borrowers. In capital market, brokerage houses or stock exchange, also play the role of intermediaries where buyers and sellers come and trade.

Intermediaries work and are used in those countries that are market driven and promote private property rights. Due to this reasons, intermediaries emerge and facilitate the trade. In return, then gain the benefits via margins or interest rate spreads. So, intermediaries build the flow of funds and its movement to give acceleration to the economy. It happens when economies are market driven.