• It means by-passing the banks. It refers to corporations borrowing directly from institutions or individuals. Disintermediation occurs when corporations issue bonds or commercial paper instead of taking a bank loan. Similarly, individual savers can disintermediate by putting money in mutual funds directly instead of using checking and savings accounts at the banks.

• Withdrawal of funds from a financial institution in order to invest them directly.


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 Embedded terms in definition
 Commercial paper
Financial institution
Mutual funds
Mutual fund
 Referenced Terms
 Intermediation: Investment through a financial institution. Related: Disintermediation.

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