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Financial Markets > ADI's > Flashcards

ADI's Flashcards

1
Q

What is an ADI?

A

An authorised Deposit-taking institution

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2
Q

What is intermediation?

A

The process of indirect financing

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3
Q

What is indirect financing?

A

Where financial institutions (mainly banks) acquire funds from surplus units and make loans to deficit units.

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4
Q

How does intermediation increase the flow of funds?

A
  1. by adding the demand for funds when banks deposit accounts to satisfy the financing preferences of surplus units.
  2. by efficiently supplying funds to deficit units
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Financial Markets (7 decks)

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