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Being a link of financial system, financial intermediaries do play role in the functioning of both certain region’s local economy and, what is the most important, global economy functioning. As technological progress provides more and more advanced means and procedures, new opportunities occur for financial intermediation: financial intermediaries and financial markets are linked now through a vast international telecommunications network, so that the transfer of payments and trading of securities can go virtually around the clock. That is, nowadays the opportunities for intermediation are huge, and so are problems and difficulties on the way of successful functioning. Anyway, the role financial intermediaries play is crucial. The aim of this work is to show the real role of financial intermediation on the sample of Kazakhstani depository financial institutions, along with determining the real opportunities of Kazakhstani depositary financial intermediaries by the comparison with the experience of ones that operate in the USA and provide the same services.
FINANCIAL SYSTEM AND INTERMEDIATION
The financial system encompasses the markets, intermediaries and other institutions used to carry out the financial decisions of households, businesses and governments. The main function it carries is interaction among various players in the financial system – the flow of funds from surplus units to deficit ones – might be represented as on the following simplified scheme:
Scheme 1. Flow of funds
The scheme shows that funds accumulated can be redistributed both with the help of markets and intermediaries. Here, financial intermediaries are defined as firms whose primary business ...