Disintermediation

AAA

DEFINITION of 'Disintermediation'

1. In finance, withdrawal of funds from intermediary financial institutions, such as banks and savings and loan associations, in order to invest them directly.

2. Generally, removing the middleman or intermediary.

INVESTOPEDIA EXPLAINS 'Disintermediation'

Disintermediation is usually done in order to invest in instruments yielding a higher return.

RELATED TERMS
  1. Disintermediary

    Anything that removes the "middleman" (intermediary) in a supply ...
  2. Reintermediation

    1. Individuals withdrawing funds from nonbank investments such ...
  3. Current Account, Savings Account ...

    CASA accounts are most prominent in middle and southeast Asia, ...
  4. Middleman

    A slang term for an intermediary in a transaction or process ...
  5. Financial Intermediary

    An entity that acts as the middleman between two parties in a ...
  6. Return

    The gain or loss of a security in a particular period. The return ...
RELATED FAQS
  1. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    The Lowdown On No-Load Mutual Funds

    These funds let you cut out the middleman - and the fees.
  2. Options & Futures

    Savings Accounts Not Always The Best Place For Cash Assets

    Money market funds may be all that stands between you and increasing your wealth.
  3. Stock Analysis

    What is the Price-to-Sales Ratio?

    The price-to-sales ratio is an indicator of the value placed on each dollar of a company’s sales or revenues.
  4. Budgeting

    5 Smart Tips For Raising Financially Literate Kids

    Help your children learn to be financially literate with these strategies. Financial savvy begins with what they learn from their parents.
  5. Investing

    What are Direct Costs?

    Direct costs for finished goods refer to the items and services directly used in production. Other costs such as rent and insurance for the production site are indirect costs. These costs may ...
  6. Investing

    What's a Hurdle Rate?

    Hurdle rate has two meanings. In the business world, a business typically makes a decision on a capital project based on the net present value approach. To determine the net present value, the ...
  7. Investing

    What's an Agency Problem?

    An agency problem occurs when a conflict of interest arises for an agent -- a person acting on behalf of another person. The conflict of interest arises when the agent’s own interests are different ...
  8. Fundamental Analysis

    What's Fair Value?

    Fair value has three different meanings depending on the context.
  9. Investing Basics

    The Dodd-Frank Wall Street Reform Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly called Dodd-Frank, was passed in 2010. The goal of the act is to prevent another great recession like that of 2008, which ...
  10. Investing Basics

    What is Securitization?

    Securitization is the process of converting an asset, or group of assets, into a marketable security. Often times, the securitized assets are divided into different layers, or tranches, tailored ...

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center