Question

Economists group commercial​ banks, savings and loan​ associations, credit​ unions, mutual​ funds, mutual savings​ banks, insurance​ companies, pension​ funds, and finance companies together under the heading financial intermediaries. What function do financial intermediaries​ perform?

Answer 1

Financial intermediaries act as a medium between agent with surplus funds and agents in need of funds.

Step-by-step explanation:

Financial intermediaries are a type of financial institutions. They perform a number of important functions for the financial market and the economy as a whole. Examples of financial intermediaries are commercial banks, mutual funds, pension funds, etc.

The main function of financial intermediaries is to connect borrowers and lenders. They ensure the flow of funds from surplus areas to deficit areas. Indirectly, they help in economic growth as they provide funds for investment.