Lending institutions act as delegated monitors and can diversify and reduce their risk exposure,resulting in increased safety for savers' funds.

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Lending institutions have the ability to act as delegated monitors, meaning they oversee borrowers and ensure that they are using the funds for their intended purpose. This reduces the risk exposure for the lending institution and allows them to diversify their lending portfolio. This increased safety for savers' funds, as it reduces the likelihood of default or significant losses.

Lending Institutions Act as Delegated Monitors and Can Diversify and Reduce