A) What is the relationship between securitization and the role of financial intermediaries in the economy? B) What happens to financial intermediaries as securitization progresses?

What is the relationship between securitization and the role of financial intermediaries in the economy?

Securitization reduces or breaks the intermediary role as it provides the participation means in the market. When the securitization rate increases, the financial intermediaries, on the other hand, are required to provide services that have faster liquidity of assets to several customers.

What happens to financial intermediaries as securitization progresses?

As securitization progress, other activities such as short term liquidity to its consumers, individuals with small business and financial services should be increased by financial intermediaries. It usually shifts the primary role of financial intermediaries. A long time ago, financial intermediaries used to pool money from various loans of investors that had been loaned to organizations in their places. Nowadays, securitization has made this function to be offered as security.