ABSTRACT
This chapter deals with the financial institutions other than the commercial banks. It outlines the insurance and pension companies that have important repercussions on financial markets. The chapter looks at a group of institutions performing various functions which usually go under the title of 'financial intermediaries'. It discusses implications of these intermediaries for monetary policy, their impact on liquidity and finally their influence on financial markets. Financial intermediaries accept claims on other people, and in exchange offer their liabilities, that is claims against themselves. The special finance agencies include four institutions: the Agricultural Mortgage Corporation, the Finance Corporation for Industry, the Industrial and Commercial Finance Corporation and the Commonwealth Development Finance Company. In general, the capital of these institutions comes from the Bank of England and the commercial banks, with, in the case of CDFC, some being subscribed by a number of Commonwealth central banks. The financial intermediaries provide a channel for finance to get to ultimate borrowers.
