2. Thrift Institutions: Savings and loan associations, credit unions, and mutual savings banks that accept deposits and make loans.
3. Money Market Funds: Invest in low-risk, short-term debt securities, such as commercial paper and treasury bills.
4. Discount Brokers: Facilitate transactions in money market instruments, such as commercial paper and treasury bills.
*Function of financial intermediaries in money and capital market:
1. Risk Management: Financial intermediaries help manage risk by pooling funds, diversifying investments, and providing insurance products.
2. Maturity Transformation: They convert short-term deposits into long-term loans, providing liquidity to the financial system.
3. Information Asymmetry: Financial intermediaries help bridge the information gap between savers and
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2. Capital Market:
The capital market is a segment of the financial system where long-term debt and equity securities are traded. Think of it as a marketplace where companies, governments, and individuals can raise funds for long-term projects and investments.
In essence, the capital market is a crucial engine for economic growth, connecting those with surplus capital to those with investment needs, fostering innovation, and propelling economic progress.
