Intermediated market

Intermediated market

A financial market in which some financial institution stands between counterparties to financial transactions.

Intermediated Market

A situation in which one or more financial institutions stand between counterparties in a transaction. For example, in the sale of a house, a bank usually intermediates the market by providing a mortgage to the homebuyer. In some non-traditional transactions, a bank may buy a product (e.g. corn) and immediately re-sell the corn for a profit to a third party. Most transactions requiring a loan to one of the parties are de facto intermediated markets. See also: Murabaha.