ABSTRACT
The channels for intermediation introduced in Chapters 6–9 are mutually competitive and complementary, in theory and partly in practice. Chapter 4 saw banks and open markets as systemic alternatives, and we look here at fund management and non-traditional intermediation, to encompass organizations that engage with banks and in financial markets as transaction users, counterparties or competitors, and the product alternatives to banks available to savers, borrowers and other users of money. Non-bank intermediation functions throughout our sample economies and is significant in several. Its scale and influence rises:
As financial systems mature;
When professional and individual consumers demand greater choice in financial instruments and services; and
If governments encourage systemic diversity or become willing to loosen their control over intermediation.
