Disintermediation involves
A)an increase in regulatory restrictions on bank lending.
B)a shift by depositors from bank deposits to other investments.
C)an increase in borrowing from banks at the expense of alternative sources of funds.
D)a decrease in interest rates following an expansion in the money supply.

Question

Quizplus · Accepted Answer

Disintermediation refers to the process of depositors moving their funds out of traditional banking institutions and into alternative investments with potentially higher returns. This can occur due to various factors such as low-interest rates offered by banks or increased confidence in other investment options.

Disintermediation Involves