25556 Chapter Notes - Chapter 5: Arab Bank, Westpac, Payment Service Provider
Document Summary
Intermediation is the traditional role of adis (banks) - to accept deposits in order to fund loans. Intermediation is distinguished by: separate contracts with surplus and de cit units, net interest income - the di erence between the interest income from supplying funds to de cit units and the interest paid to surplus units. Adis enhance the ow of funds because they can attract funds that would otherwise not be supplied. They do this by managing the mismatches between the preferences of depositors and borrowers. They transform many small deposit balances into fewer larger loans, and short-term deposits into long-term loans. The di erence between the average interest rate earned and the average interest rate paid by. Bank fees such as account servicing fees. Short term securities issued in wholesale and domestic overseas nancial markets. Long term securities issued domestically and in overseas nancial markets.
