financial intermediary

A **financial intermediary** is an institution or entity that acts as a middleman between savers and borrowers, facilitating the flow of funds within the financial system. Common examples include banks, credit unions, mutual funds, and insurance companies. These intermediaries help allocate resources efficiently by channeling funds from those who have excess capital to those who need financing, while managing risks and providing liquidity. Understanding the role of financial intermediaries is essential for grasping how modern economies function and how investments, loans, and savings are coordinated.