ASummaryof theRoleofCOFinancial Intermediaries1.Pooling Savings: Accepting resources from alarge number of small savers/lenders in orderto provide large loans to borrowers.2.Safekeeping and Accounting: Keepingdepositors' savings safe, giving them access tothe payments system, and providing them withaccounting statements that help them to tracktheir income and expenditures11-6
11-6 A Summary of the Role of Financial Intermediaries 1.Pooling Savings: Accepting resources from a large number of small savers/lenders in order to provide large loans to borrowers. 2.Safekeeping and Accounting: Keeping depositors’ savings safe, giving them access to the payments system, and providing them with accounting statements that help them to track their income and expenditures
6.3InformationAsymmetriesandCInformationCosts1. asymmetric informationissuers offinancial instruments-borrowerswho want to issue bonds and firms that wantto issue stock - know much more about theirbusinessprospectsandtheirwillingnesstoworkthanpotential lenders or investors11-7
11-7 6.3 Information Asymmetries and Information Costs • 1. asymmetric information • issuers of financial instruments – borrowers who want to issue bonds and firms that want to issue stock – know much more about their business prospects and their willingness to work than potential lenders or investors