Role in Financial System
NBFIs supplement banks by providing the infrastructure to allocate surplus resources to individuals and companies with deficits. Additionally, NBFIs also introduces competition in the provision of financial services. While banks may offer a set of financial services as a packaged deal, NBFIs unbundle and tailor these service to meet the needs of specific clients. Additionally, individual NBFIs may specialize in one particular sector and develop an informational advantage. Through the process of unbundling, targeting, and specializing, NBFIs enhances competition within the financial services industry.
Read more about this topic: Non-bank Financial Institution
Famous quotes containing the words role in, role, financial and/or system:
“Friends serve central functions for children that parents do not, and they play a critical role in shaping children’s social skills and their sense of identity. . . . The difference between a child with close friendships and a child who wants to make friends but is unable to can be the difference between a child who is happy and a child who is distressed in one large area of life.”
—Zick Rubin (20th century)
“All of the assumptions once made about a parent’s role have been undercut by the specialists. The psychiatric specialists, the psychological specialists, the educational specialists, all have mystified child development. They have fostered the idea that understanding children and promoting their intellectual well-being is too complex for mothers and requires the intervention of experts.”
—Elaine Heffner (20th century)
“One of the reforms to be carried out during the incoming administration is a change in our monetary and banking laws, so as to secure greater elasticity in the forms of currency available for trade and to prevent the limitations of law from operating to increase the embarrassment of a financial panic.”
—William Howard Taft (1857–1930)
“Ethics and religion differ herein; that the one is the system of human duties commencing from man; the other, from God. Religion includes the personality of God; Ethics does not.”
—Ralph Waldo Emerson (1803–1882)