DEFINITION of 'Reintermediation'

1. Individuals withdrawing funds from nonbank investments such as real estate and depositing into bank and depositary financial-institution accounts. Reintermediation usually occurs to secure federal deposit insurance on account funds, out of uncertainty about the movement of the financial markets or changes in the interest-rate environment.

2. Opposite of disintermediation.

BREAKING DOWN 'Reintermediation'

Reintermediation can also mean the re-emergence of, or reintroduction of, middlemen or intermediaries that had previously been removed from a process or industry. The term is usually used in this context in retail channels, such as when an industry decides to return to selling to wholesalers and ceases selling directly to consumers.

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