What are the functions and functions of financial intermediaries?

Financial intermediary refers to the media organization that absorbs funds from the fund suppliers and then raises funds from the fund demanders. In order to realize the intermediary function, financial intermediaries usually issue various subordinated securities, such as certificates of deposit and insurance policies, in exchange for funds. Because there are great differences in subprime securities issued by various financial intermediaries, economists take these differences as the basis for the classification of financial intermediaries.

Generally speaking, financial intermediaries that issue subordinated monetary securities, such as passbooks and certificates of deposit, are called deposit money institutions. These subordinated securities issued by deposit money institutions not only account for most of the liabilities of deposit money institutions, but also belong to a part of money supply.

As for the subordinated securities issued by non-deposit monetary institutions, such as insurance policies, they account for a large part of the liabilities of non-deposit monetary institutions, and these subordinated securities are not part of the money supply. Financial intermediaries have indirect claims according to whether or not to issue currency.

function

1, the financial intermediary realizes the efficient integration and matching of capital flow, logistics and information flow.

As we all know, the birth of industrial technology has brought about the expansion of production scale and the improvement of production capacity, requiring products to break through the narrow geographical scope and gain a broader market space, and the transportation industry has emerged. The emergence and development of the transportation industry has expanded the scope of logistics and improved the efficiency of logistics.

When human beings build a huge tangible railway and route network, the first problem they encounter is the lack of funds; The development of transportation industry makes the large-scale production and sales of products become a reality, which in turn promotes the further expansion of production scale, and also urges enterprises to greatly increase their demand for funds, the formation of financial markets, and the emergence of financial intermediary organizations such as banks and credit and other financial intermediary tools.

The need to raise funds and avoid risks has led to the birth of a new form of enterprise organization-shareholding system, and the emergence of a matching securities market. The emergence of capital market and money market makes it possible for enterprises to expand, contract and transfer rapidly. Money market and capital market, as carriers of capital flow, make capital flow and allocate in a large range.

The expansion of production scale and market scope has produced the demand for information exchange. The premise of improving the efficiency of logistics and capital flow and reducing blindness is information communication, and the information service industry came into being. The respective functions of transportation, finance and information industries, which belong to the service industry, have realized the matching of capital flow, information flow and logistics, and ensured the operational requirements of the real economy and the virtual economy.

The innovation, diffusion, development and integration of information technology triggered by the information revolution not only provide a new economic development mode and a new technical paradigm for human society, but also solve various problems in the process of information transmission and commodity trading, and promote the comprehensive innovation from financial intermediary market, financial intermediary institutions to financial intermediary media. As a result of financial innovation, financial intermediaries have a stronger ability to penetrate the whole social economy.

The financialization of the whole social economy has been greatly improved, and the securitization of various assets has greatly improved the liquidity of physical assets. The development of derivative financial instruments meets the needs of investment and risk avoidance in real economy and virtual economy, making the automation of capital flow a reality.

The development of financial intermediaries not only makes the capital flow highly meet the requirements of logistics and information flow, but also promotes and strengthens the development needs of the real economy. It is the efficient integration and matching of "three streams" that enables social resources to be integrated and configured in the most effective and fastest way, and the social economy has entered a new development form.

2. Financial intermediation improves the efficiency of resource allocation.

First of all, it is the existence of various financial media that leads to the emergence of capital creation mechanism, which enables monetary capital to be smoothly introduced into industrial capital circulation to meet the demand for funds for economic growth. Financial intermediaries play an incremental and stock adjustment role in the whole national economy through their own activities. Financial intermediary not only constructs and activates the financial market, but also activates the whole social economy.

Secondly, financial intermediaries separate the value forms and rights of wealth from various physical forms and turn them into virtual financial assets, so that social wealth can flow conveniently in the form of symbols, the scope of resource allocation is infinitely expanded, and the efficiency of allocation is greatly improved. The resource allocation of the whole society has really entered the era of efficiency.

3. The transaction cost saving function of financial intermediaries

The evolution of the system is a process of saving transaction costs, and the existence of intermediary media is the key link to save transaction costs.

The history of human economic development is a history of continuous technological and institutional innovation, continuous reduction of production costs and transaction costs, thus improving the efficiency of economic operation. First of all, the emergence of regular fairs broadens the choice of transactions and improves the transaction rate under the condition of fixed transaction costs.

It not only reduces the time cost spent on the road, but also reduces the contingency and waiting time cost of the transaction to a certain extent, thus greatly reducing the transaction cost of the unit commodity. Then the birth of currency shortened the intermediate link of the transaction, made the exchange smoother, and saved the search and waiting costs needed for the exchange.

The appearance of businessmen is only the beginning of specialized trading activities. With the development of productive forces and the innovation of trading technology, there has been a division of labor among businessmen: wholesalers, middlemen, retailers and so on. Every specialization has brought about the reduction of transaction cost and the expansion of transaction scope, at the same time, it has also made the market system more and more extensive, and the specialized organization of transactions-commercial enterprises has emerged.

As a result, the transaction cost is further reduced and the transaction scope is further expanded. The expansion of trading scope stimulates the expansion of enterprise scale and the improvement of enterprise production capacity, and the demand for funds increases, which brings the emergence of capital factor market.

Capital plays a key role in the expansion of enterprise scale. The birth of banks as intermediary organizations in the money market has brought about the improvement of transaction efficiency and the reduction of transaction costs in the money market. However, the scale of indirect financing by banks is limited and the term is short, so it is difficult to meet the needs of enterprise development simply by operating the money market.

The need to raise funds and avoid risks has led to the birth of a new form of enterprise organization-shareholding system, and the emergence of a matching securities market. The emergence of capital market and money market makes it possible for enterprises to expand, contract and transfer rapidly. Money market and capital market are carriers of capital flow.

It enables capital to flow and allocate in a wide range, greatly improves the efficiency of capital market transactions and reduces the transaction cost of the capital market. Now the virtualization level of the national economy is getting higher and higher, which is closely related to the reduction of transaction costs brought about by the development of financial intermediaries.

4. The development of financial intermediaries promotes the rational development of enterprise organizations.

First of all, the existence of various financial media provides conditions for the adjustment of resource stock, which makes the merger between enterprises, including vertical integration, horizontal merger and mixed merger, feasible because of the reduction of cost.

Reorganization can not only realize the redistribution of production factors, but also realize the rapid expansion of enterprise economic scale and promote the rationalization of enterprise scale structure. In addition, financial intermediaries also promote the formation and development of enterprise organizational structure that adapts to social productive forces. For example, the multi-level holding of holding companies leads to the emergence of enterprise groups.

Secondly, financial intermediaries will socialize the mechanism of screening business operators. In the era of small commodity economy, that is, the era of usury, business operators are generally the direct owners of enterprises. In this case, the social screening function of business operators is basically impossible. After the emergence of the monetary bank financial mechanism, the screening function of the society for business operators began to strengthen, that is, people who lack professional knowledge and management experience generally find it difficult to obtain bank loans.

The activities of new financial intermediaries, such as securities, securities markets and investment banks, have extended the supervision mechanism of enterprise operators from a single banking system to all aspects of society, greatly improving the operating mechanism of enterprises and rationalizing their behaviors and decisions.

Extended data

To discuss the problem of financial intermediary, we must first define the connotation of financial intermediary. Flex & Rochet (1997) believes that financial intermediaries are professional economic sectors engaged in financial contracts and securities trading activities. John Chant (1990) thinks that the essence of financial intermediary is to insert a third party between the ultimate borrower and the ultimate lender in the process of saving-investment transformation.

That is to say, the financial intermediary not only borrows money from the lender of last resort, but also lends it to the borrower of last resort, which not only owns the creditor's rights to the borrower, but also issues the creditor's rights to the lender, thus becoming a party to financial activities. Gerry & Shaw (1956, 1960), Bengston George (1976) and Fama (1980) pointed out that financial intermediaries (banks, mutual funds, insurance companies, etc.) are financial contracts and financial contracts.

The financial claims issued by financial intermediaries are far more attractive to ordinary depositors than those directly issued by enterprises. In the process of asset conversion, financial intermediaries buy so-called first-class securities such as stocks, bonds and other creditor's rights issued by enterprises, and sell the ownership of financial forms to resident investors and other departments in the form of certificates of deposit and insurance policies to raise funds for purchasing these corporate securities.

The rights of financial intermediaries in financial form may be regarded as secondary securities, because these assets are guaranteed by primary securities issued by industrial and commercial enterprises, which use the raised funds to invest in real estate. In the ideal frictionless complete financial market, both investors and borrowers can get diversified choices and the best risk sharing state.

Once the inseparability and non-convexity of trading technology are less, the ideal diversified state no longer exists, and the participation of financial intermediaries is needed. Therefore, financial intermediaries can also be regarded as a single borrower seeking economies of scale in trading technology, and as a result, individuals have obtained nearly perfect diversified choices.

In reality, financial intermediaries mainly include bank intermediaries (some are also called deposit-taking intermediaries). In the following discussion, the two statements are generally not distinguished. Mainly including deposit institutions such as commercial banks and savings institutions), insurance companies and other financial intermediaries (including securities companies and investment banks, finance companies, mutual funds and investment funds, etc.). ).

Institutions, systems and laws are very important in studying financial problems. For hundreds of years, the banking system has been influenced by laws and regulations. If we don't understand the great changes in the banking system structure of different countries in different periods due to the influence of laws and regulations, it will be difficult to make progress on many issues. The most obvious is the change of the industrial organization structure of the banking system in the world and history.

This change has attracted the attention of researchers and needs further work. Risk, uncertainty, information cost and transaction cost constitute the objective requirements for the evolution of financial intermediaries, while system, law and technology constitute the realistic conditions for the evolution of financial intermediaries.