Become an analytics-minded retail banker with a fully online course from a top-ranked banking powerhouse - Lesson 3 - Introduction to Global banking

Financial intermediaries

Institutions that act as middlemen between two parties to facilitate financial transactions, usually in a risk-free manner.

Indirect finance

A practice where banks assume the risk of losses when lending money, providing added security to depositors.

Asset transformation

The process of converting short-term, low-risk deposits into long-term, high-risk loans to meet the needs of borrowers and savers.

Liquidity issues

Situations where there is not enough cash immediately available for depositors to withdraw their savings.

Credit risk

The risk that borrowers may default on their loans, leading to financial losses for the bank.

Liquidity risk

The risk of not having enough cash or liquid assets to meet the demands of depositors.

Market risk

The risk of financial losses due to changes in market conditions or factors affecting the value of investments.

Proprietary trading

The practice of a bank trading financial instruments using its own money rather than clients' money, with the aim of generating profits.