Financial Intermediation

Topics: Investment, Bond, Finance Pages: 2 (519 words) Published: February 24, 2013
Financial intermediation consists of transforming funds between surplus and deficit units. This can take place indirectly through depositories or directly through investment banks, per say. In the article Dell Deal Done Differently, “stapling financing” was the controversial practice taken place. Stapling financing as depicted in the article is an act investment banks premeditate when offering a finance packaging to bidders during acquisition. This is a part of financial intermediation because it includes negotiation terms that providing the financing, a business with higher fees. In the article Pensions Bet Big With Private Equity it explicates how pension funds are struggling in overcoming losses. For that reason many are relying on private equity which includes nothing but having higher rates of return. This can relate to financial intermediation because private equity can help offset declines in other investments. Pension funds work more indirectly as a financial institution and although many states are struggling with them, the Texas teachers fund is %82 funded , veering $1 of liabilities. In the article ‘Disaster Bonds’ Miss Their Mark, municipal bonds, “Disaster bonds” are being targeted toward creating more “wiggle room” so when disaster strikes most of an impact is created. Some argue that disaster-bond programs haven’t always helped communities, but others argue that the funds must be targeted geographically to the places of need. This is influenced by financial intermediation if disaster bonds used correctly, in case of a disaster the bonds can be used to jump-start and create a strong foundation following a devastating event. In the article, SEC Nominee Signals Shift, many concerns and controversies are being discussed involving Ms. White. Ms. White took on many roles before being nominated by president Obama. One main concern regarding her many positions is her involvement in private and personal practices, such as the help she provides her...
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