Intermediation – Wikipedia

‘ Intermediation “Is an anglicism-the English word itself being derived from Latin” intermedius («« who is between two, who holds the middle ») – Wanting to designate the presence and role of an intermediary within the framework of an economic, financial or commercial transaction.

Political intermediation designates the presence and role of intermediary bodies. There disintermediation marks their decline.

Functioning [ modifier | Modifier and code ]

The financing of an economy can take place either by using own resources or self -financing, or by appeal to external funds.

In this last hypothesis, financial intermediation designates the fact that a company or organization chooses to appeal for its own account of establishments acting as a financial intermediary (essentially banks) to find the funds necessary for it, rather that to address itself live holders of capital (in particular by subscription of shares or bonds).

Indeed, economic agents have two techniques to obtain external resources:

1. issue stocks and obligations on the financial market: it is disintermediation;
2. Borrow from banking or non -banking intermediaries: it is intermediation.

Where notice that:

• The subscriptions of securities can also take place via financial intermediaries in the broad sense, with the difference that they make in these cases only gather and transmit orders instead of operating for their own account;
• Intermediation technology arouses the creation of financial institutions and their diversification to cover the various sectors of activity;
• The relationship between monetary theory and that of the intermediaries appears at the level of the theory of the demand for money, this request is linked to the heritage and in the face of the increase in this heritage, the economic agents distribute them as a monetary financial assets.

The tendency to disintermediation [ modifier | Modifier and code ]

Intermediate financing systems are bearers of perverse effects and waste of resources. Hence the trends in favor of financial disintermediation , the advent of emerging scholarships. Banks can participate in the process such as planning with remuneration in the form of fees, but more as a credit banker. The disappearance of exchange controls and the abolition of finance compartments have caused strong growth in these activities which can be exercised in local or currency. These promote four main new ideas:

1. the institution of the “universal” scholarship;
2. the liberalization of credits and interest rates;
3. The implementation of prudence rules: the obligation for banks to apply the solvency coefficient (the ratio Cooke ) replaced today by the McDonough ratio, which may have led to developing extrabags circuits;
4. The modernization of the institutional framework by banking law (1993).

This movement has given rise to the formalization of the so -called policy of 3D : « Decompartmentalization, disruption, disintermediation ».

Financial disintermediation ^{[ first ]} .

The weight of intermediated finance on the economy as well as its “positioning in the face of the development of market finance” can be synthetically measured from an indicator called the financial intermediation rate [TIF] ^{[ 2 ]} . It measures the share taken by resident financial institutions in all funding granted to non -financial resident agents (non -financial companies, households, non -profit organizations and public administrations). This rate can be calculated in the narrow or broad sense. Indeed when one takes into account only credits distributed by financial intermediaries, we speak of an intermediation rate in the narrow sense, while when the investments of these institutions in securities issued by non -financial agents (shares, bonds , TCN) are also taken into account, it is an intermediation rate in the broad sense. The intermediation rate therefore makes it possible to know whether, in an economy, indirect finance is predominant or not.

In addition, one of the facets of financial globalization, the term financial “disintermediation” is an anglicism. He was stated by Henri Bourguinat as part of his famous formula known as the “rule of 3 d”, which designates the movements of decompartmentalization, disintermediation and deregulation which affected the financial systems of industrialized countries in the 1980s and 1990s . Financial disintermediation comes from English ” disintermediation Who, according to the Concise Oxford English Dictionary 2008 (CD-ROM), indicates the decline in banking intermediation to financing the needs of the economy in favor of the market. Financial disintermediation is therefore a “process that leads economic agents to financing deficit [companies] to reduce their use of bank credit and use the financial market directly” ^{[ 3 ]} . As a result, there is financial disintermediation when a drop in the financial intermediation rate occurs, that is to say a relative slowdown in traditional banks’ financing activities in favor of disinterest funding.

However, it should be noted that financial disintermediation is nothing other than the reflection of the dynamics of the methods of financing an economy. We cannot speak of an economy with intermediated financing [Debt economy] to an economy with disintermediated financing [financial market economy], if and only if the evolution of these different modes of financing in the entire Funding is reflected in favor of market financing (Koleda, G., 2008).

The mode of financing an economy can evolve over time. This is the case of France where the rate of intermediation in the narrow sense increased from 70% in 1978 to 60% in 1990, 54.2% in 1994 and to around 40% from 2001 to date. However, despite changes in its intermediation rate in the strict sense (financial disintermediation), France is not yet a “country funding country”, because its broad sense remains at a level above 50% (57.8% in 2009) ^{[ 4 ]} .

Financial disintermediation is therefore not synonymous with the disappearance of financial intermediation activity, but rather an expression of the evolution and diversification of the methods of financing an economy.

Economic intermediation or commercial intermediation points to the role of intermediary to facilitate the bringing together of supply and demand, by connecting several natural or legal persons with additional interests.

Examples:

• A consumer with a purchase project searches for the seller of the property or service he wishes to acquire;
• An employer providing a job seeks the job seeker with the skills sought by this employer.

Commercial intermediation is not a new phenomenon (see the ancient and traditional role of brokers for example). These can be particularly active in markets such as that of real estate, insurance, credits, real estate work, goods, trips, stock market or currency currency

Commercial relations are constantly affected by movements leading to recompositions of the distribution, sometimes in favor of the intermediaries, sometimes against them. So :

• In favor of intermediation, the growing complexity of the technical and/or pricing characteristics of products tends to revalue the role of the intermediary as a sales advice (prescription role), or to purchase (role of Expert-Conseil);
• Over disadvantage of intermediation, the revival from which the short circuit formulas benefit directly promote producers; In such a case, the added value of the intermediaries no longer stands out, in the eyes of consumers. At the source of this trend:
  • The fact that the suppliers are increasingly gladly incorporated a high dose of service in their product offer for the definition of which they wish to come into direct contact with the applicant;
  • The new possibilities of direct relationship allowed by the emergence of information technologies which allow the possibilities of personalized dialogues, remotely, with the online supply of illustration, documentation, design or simulation functionalities (use of unprecedented configurator);
  • The search for cost reduction places intermediaries in a situation of analysis of their ratios (costs/advantages).

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