Disintermediation

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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.

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