The financial intermediaries facilitate the exchange of assets, capital, and risk between buyers and sellers. The various types of financial intermediaries are:

Some of these intermediaries are described below:

Depositary institutions

These include commercial banks, saving and loan banks, and credit unions. Depository institutions: 1) Raise funds from depositors and other investors and lend it to borrowers. 2) Give their depositors interest and transaction services, such as check writing and check cashing, in exchange for using their money, and 3) Raise additional funds by selling bonds or equity.

Investment Banks

An investment bank is a special type of financial institution that works primarily in higher finance by helping company access the capital markets, such as stock market and bond market, to raise money for expansion or other needs. They also provide advice to firms, notably about mergers and acquisitions.

Brokers, Exchanges and Alternative Trading Systems (ATS)

Brokers help their clients buy and sell securities by finding counterparties to trades in a cost efficient manner. They may work for large brokerage firms, for banks, or at exchanges.