The process by which commercial banks transform funds provided by savers into funds used by borrowers is called _____.

Question

Quizplus · Accepted Answer

Financial intermediation refers to the process by which financial institutions (such as commercial banks) act as intermediaries between savers and borrowers. This involves accepting deposits from savers and using that money to provide loans to borrowers, earning a profit through the difference in interest rates. The other answer choices (A, B, C, and D) are all related to specific activities or processes within finance, but do not accurately describe the overall process of transforming funds from savers to borrowers.

The Process by Which Commercial Banks Transform Funds Provided by Savers