Financial markets allow those with excess funds to connect with those with a shortage of funds. The
transaction that allows for the transfer of funds can occur through direct or indirect finance. Debt and
equity markets, primary and secondary markets, exchanges and over-the-counter markets, and
money and capital markets are all types of financial markets. Some financial institutions are
intermediaries that issue liabilities to get funds and use those funds to get assets by buying securities
or making loans. There are 3 types of financial intermediaries: 1) banks, 2) contractual savings
institutions, and 3) investment intermediaries.
Let us learn more about financial intermediaries by examining the Federal Reserve?s
U.S. Flow of Funds Report. Click the link below or copy and paste the link into your browser.
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