Chapter 1 Flashcards
1
Q
Denomination intermediation
A
Process whereby small investors are able to purchase pieces of assets that normally are sold in large denomination -> without FIs, individuals would hold highly undiversified asset PFs
2
Q
Net regulatory burden
A
Private cost for FIs imposed by regulations
3
Q
Maturity intermediation
A
When net borrowers and net lenders have different optimal time horizons, FI can match their asset and liabilitiy maturities (through hedging activities)
