Financial intermediation: an exploration of the theoretical foundations

L'intermédiation financière: une exploration des fondements théoriques

Sara Bayoud ()
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Sara Bayoud: UM5 - Université Mohammed V de Rabat [Agdal]

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Abstract: Banking institutions play a central role in the global economy as essential financial intermediaries between depositors and borrowers, thereby contributing to economic stability and growth. However, the significant evolution of their role over time, in response to technological, regulatory, and societal changes, is also emphasized. The article highlights the vital role of banks as a crucial element of a dynamic financial ecosystem capable of maintaining a balance between economic stability and financial innovation. By exploring the theoretical foundations of banking activity, the study focuses on the theories of financial intermediation and banking intermediation, and analyzes the historical evolution of this issue, illustrating the transition from a debt-based economy to a market-based economy. Furthermore, the article examines the theory of financial intermediation as a framework governing the ways of financing the economy, then focusing on banking intermediation as an alternative to direct finance. This alternative is presented as a means to address the imperfections of financial markets.

Keywords: Banking institutions; Financial intermediaries; Financial ecosystem; Financial markets.; Institutions bancaires; Intermédiaires financiers; Écosystème financier; Marchés financiers. (search for similar items in EconPapers)
Date: 2024-02
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Published in African Scientific Journal, 2024, Vol : 3 (Numéro : 22), pp: 0893 - 0916. ⟨10.5281/zenodo.10820868⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04518394

DOI: 10.5281/zenodo.10820868

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