What is the role of an intermediary in financial transactions?

The role of an intermediary in financial transactions is primarily to facilitate transactions between two parties. Intermediaries serve as brokers or agents that help bring together buyers and sellers, ensuring that the transaction process runs smoothly and efficiently. They can provide valuable services such as matching buyers with sellers, processing transactions, and sometimes even handling the associated paperwork. By acting as a middleman, intermediaries reduce friction and help both parties achieve their goals in the transaction.

In the realm of finance, intermediaries can include entities like banks, brokerage firms, and investment companies, which play a crucial part in the flow of funds in the capital markets. Their presence helps enhance liquidity and price discovery in the market, contributing to overall economic efficiency.