The existence of financial intermediaries greatly increases the efficiency of financial markets because, without them, savers would have to provide funds directly to borrowers, which would be a costlier process.

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Financial intermediaries, such as banks and mutual funds, provide a cost-effective way for savers to invest their money while also making it easier for borrowers to access funds. This process helps to reduce transaction costs and improve the overall efficiency of financial markets. Without financial intermediaries, savers and borrowers would have to find each other directly, which would be a more expensive and time-consuming process.

The Existence of Financial Intermediaries Greatly Increases the Efficiency of Financial