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Running head: FINANCIAL ANALYSIS
Financial Analysis
Student’s Name
Institutional Affiliation
1
FINANCIAL ANALYSIS
2
Financial intermediation
Financial intermediation refers to a process of accepting deposits from the savers or
depositors and lending them out to the borrowers. The banks facilitate the financial needs between
the savers or depositors and the borrowers through the financial intermediation process. Banks
allow depositors to deposits at low-interest rates and lend the saved amount to the borrowers at the
slightly high-interest rates.
On the other hand, financial disintermediation refers to the act or the process of
withdrawing funds from a financial institution or an intermediary with the aim of investing in the
instruments with a higher rate of return. The process aims at cutting off the act or the role of an
intermediary in future investments or financial transactions.
Financial intermediation plays an important role in the economic growth since it directs
the funds to the productive sector through lending. Additionally, it controls the rate of inflation by
manipulating or controlling the amount of money in circulation. Financial intermediaries like
banks help savers and borrowers in risk diversification by offering various types of the loan so that
the risk is spread over the loans.
Investment banking
Investment banking is a banking division that majorly deals with the capital creation for
the government, companies and other entities as well. They help all corporations in underwriting
equity securities and the new debts to facilitate reorganizations, mergers and a...