The lot size transformation is one of the three functions, which transfer financial markets and financial establishment ions in a national economy. (The remaining two functions are the period transformation and the risk transformation). By the financial markets the capital requirement of the debtors (private people, enterprise, state) with the plant desires of the savers in agreement are brought. The function of the lot size transformation of the financial markets consists now of applying by bundling of many small savings amounts high amounts of capital.

Example

For the financing of a home of one's own family Z needs an amount of capital of 100.000 EUR. Without the existence of a financial market family Z would have to go on the search for a saver or several saver, who puts/this capital or partial amounts of it to them at the disposal. As financialintermediate it is task of the bank, the capital requirement of the family Z - to take if it off credit with dignity actual by bundling of savings deposits of most different height. It receives inserts of those, which want to save, pays them interest and continues to lend the money to those, the money to take up would like. In addition the interest difference covers the costs of the bank and is the profit of the owners of the bank to obtain.

Articles in category "Lot size transformation"

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