Financial intermediary

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Financial intermediaries ( English financial intermediaries ) are companies based on the financial market as an intermediary between demand and supply of business entities to financial instruments and financial instruments occur, this balance and convert it at that.

General

The four groups of service providers in finance , namely financial appraisers (in particular credit rating agencies , business consultants ), Finanzauktionatoren (especially stock exchanges , brokers ), market makers (especially investment banks , foreign exchange dealers ) and financial producers (in particular credit institutions, insurance companies, investment funds) only the Market-operate Makers and financial producers real financial intermediation because they convert financial contracts .

The view of banks as financial intermediaries has been rejected by various central banks since the financial crisis from 2007 onwards . They emphasize the active role of commercial banks in creating money .

species

Financial intermediaries are, in particular, credit institutes , insurance companies , building societies , credit card companies , capital investment companies , leasing or factoring companies , venture capital funds , hedge funds , credit brokers or even shadow banks . Financial instruments and products are offered, but also asset management , portfolio management , credit servicing , broker pools or mere financial advice . Inquirers can be other financial intermediaries and non-banks ( companies , legal entities under public law and natural persons ). Financial intermediaries are thus mediators between the supply and demand of capital.

Liechtenstein

A financial intermediary in the Principality of Liechtenstein is a natural or legal person who is subject to the supervision of the Liechtenstein Financial Market Authority and who provides relevant services to relevant persons.

A financial intermediary in Liechtenstein provides relevant services with regard to relevant assets:

  • who serves as a member of a board of directors, board of trustees or foundation board or as an executive employee;
  • to provide a registered office;
  • who has the personal or fiduciary authority to appoint beneficiaries, trustees or assets;
  • who holds any form of property, be it under the terms of a trust or a contract; or
  • Provides banking services in accordance with applicable Liechtenstein law.

According to Art. 3 AIFMV, financial intermediaries who regularly manage financial instruments or also trade with them are “investment firms” within the meaning of Art. 2 Para. 2 lit. i AIFMG or Art 3 Para. 2 of the Banking Act. The Liechtenstein financial market supervisory authority can also recognize financial intermediaries as providers of collateral without the provision of collateral if they have been approved by the FMA and are supervised and are subject to similar supervisory requirements as banks.

Financial intermediaries licensed in Liechtenstein can also act as insurance intermediaries in particularly worthy of consideration and then require no or only partial proof of professional qualifications, provided that the interests of the policyholders are adequately safeguarded. The Liechtenstein Financial Market Authority decides on this.

Other financial intermediaries

As other financial intermediaries, according to FMAG

  • Trustees under the Trustees Act,
  • Persons with restricted trustee licenses according to Art 180a PGR ,
  • partly patent attorneys according to the patent attorney law,
  • Auditors and auditing companies in accordance with the law on auditors and auditing companies,

Roger that. Until 31 December 2013 were among them lawyers subsumed who exercised certain due diligence related activities.

Transformation services

To overcome imperfections in the financial markets, financial intermediaries offer three transformation services that can be divided into deadline , lot size and risk transformation services . Transformation is the redesign or conversion of financial instruments and financial products into a form that meets demand. In the maturity transformation, they convert the different maturity interests of the economic subjects, the lot size transformation leads to the conversion of different amounts of money , in the risk transformation different risk appetites of the market participants are balanced by financial intermediaries.

Economic importance

A modern economy can only function if an efficient capital transfer and the efficient allocation of cash surpluses and deficits are ensured. The transformation services of the financial intermediaries ensure that the initially mostly non-demand-compliant financial instruments and financial products on the supply side are converted into demand-oriented ones. The allocation of small-value savings to existing larger capital requirements in other economic entities can in this way contribute to directing capital to the most efficient place.

The imperfection of the capital market can be proven, among other things, by the existence of financial intermediaries, when they mediate between borrowers and lenders and contribute to an extensive market clearing . The individual providers and buyers do not have sufficient market transparency and specialist knowledge to be able to do without financial intermediaries. However, in the context of place disintermediation a partial shift of transformation services in favor of the money or capital market , large non-bank - groups ( Holdings ) or shadow banks instead.

Individual evidence

  1. ^ Ernst Baltensperger , Banks and Financial Intermediaries , in: Jürgen von Hagen u. a., Springer's Handbuch der Volkswirtschaftslehre, Volume 1, 1996, p. 270
  2. ↑ Diemo Dietrich / Uwe Vollmer, financial contracts and financial intermediation , 2005, p. 3
  3. ↑ Bank of England: Money creation in the modern economy | Bank of England. March 14, 2014, accessed February 4, 2019 .
  4. ↑ Deutsche Bundesbank, Monthly Report April 2017 , The Role of Banks, Non-Banks and Central Banks in the Money Creation Process, page 19f
  5. ↑ Gabler Wirtschaftslexikon , 1993, p. 1132
  6. ^ N. Gregory Mankiw, Principles of Economics , South Western Education, 5th edition, 2008, pp. 578 ff., ISBN 9780324589979
  7. ↑ Art 3 para. 1 lit. c) Law of June 30, 2010 on administrative assistance in tax matters with the United Kingdom of Great Britain and Northern Ireland (Tax Office Assistance Act -UK; AHG-UK), LGBl 248/2010.
  8. ↑ Art 3 para. 1 lit. h) Tax Administrative Assistance Act-UK.
  9. ↑ Ordinance of July 2, 2013 on the managers of alternative investment funds (AIFMV), LGBl 259/2013.
  10. ↑ The terms “ company ” and “ company ” are repeatedly confused by the Liechtenstein legislature.
  11. ↑ Law of December 19, 2012 on the managers of alternative investment funds (AIFMG), LGBl 49/2013.
  12. ↑ Law of October 21, 1992 on banks and investment firms (Banking Act; BankG), LGBl 108/1992.
  13. ↑ See Section 3, Part 1, Point 5.1. Supplementary provisions for determining the capital required for credit risks and securitisations (Art. 29 to 80) to the Ordinance of December 5, 2006 on Capital Adequacy and Risk Distribution for Banks and Investment Firms (Capital Adequacy Ordinance; CAO), LGBl 280/2006. See also Art 3 Para. 1 lit. d), Art 5 para. 1 lit. d) and Art 17 Securities Prospectus Act (WPPG) of 23 May 2007, LGBl 196/2007.
  14. ↑ Art 2 Paragraph 4 Ordinance of June 27, 2006 on Insurance Mediation (Insurance Mediation Ordinance; VersVermV), LGBl 136/2006.
  15. ↑ Appendix 1 to the Act of June 18, 2004 on Financial Market Supervision (Financial Market Supervision Act; FMAG), LGBl 175/2004.
  16. ↑ Trustees Act (TrHG) of November 8, 2013, LGBl 421/2013.
  17. ↑ Law of December 9, 1992 on Patent Attorneys (Patent Attorney Act; PAG), LGBl 43/1993.
  18. ↑ Law of 9 December 1992 on auditors and auditing companies (WPRG), LGBl 44/1993.
  19. ^ John G Gurley / Edward S Shaw, Money in a Theory of Finance , 1960, p. 192