CHAPTER 3 The What, How, and Why of Financial Intermediaries

“All essential knowledge relates to existence, or only such knowledge as has an essential relationship to existence is essential knowledge.”

Soren Kierkegaard: Concluding Unscientific Postscript

Glossary of Terms

Securitization: The act of converting an untraded (debt) claim, such as a bank loan, into a traded security by issuing claims against it and selling these claims to capital market investors. Essentially, securitization is a form of direct capital market financing with the bank acting as an originator and repackager of the loan.

Fractional Reserve Banking: A banking system in which banks must hold a specified fraction of their deposit liabilities as liquid assets.

Fiat ...

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