Financial Intermediation

Explain the concept of financial intermediation.
Determine if financial intermediation increases the efficiency of the financial system.

2. Prior to beginning work on this assignment, read the Financial Systems, Industrial Structure, and Growth article.

Assume that you are an investment advisor at one of the local brokerage firms where you reside. Your manager has requested you give a presentation to a newly formed investment club on how financial institutions and financial markets operate.

Develop a 10-to 12-slide presentation that addresses the following elements:

Defend the study of financial institutions and financial markets.

Determine the key participants in financial transactions.

Describe and diagram the three different methods of capital formation.

Examine financial intermediaries including their purpose, structure, and operation.

Explain how financial intermediaries and financial markets are dependent on each other.

Explain the importance of fully developed financial markets.

Sample Solution

Financial Intermediation
Financial intermediation is the process by which financial institutions mediate unmatched preferences of ultimate borrowers and ultimate lenders. Financial intermediaries are important because they significantly reduce the transaction costs that are associated with the process. For example, if borrowers and lenders are able to use the services of the intermediaries, they would not have to go through the legal process of establishing and writing contracts. Financial intermediaries transform claims to make them more attractive to both Deficit Spending Unit (DSUs) and Surplus Spending Unit (SSUs). This increases the amount and regularity of participation in the financial system, thus promoting the three forms of efficiency: allocational, informational, and operational.

foreignization versus domestication: ‘the question of how much a translation assimilates a foreign text to the translating language and culture, and how much it rather signals the differences of that text’ (Venuti, 1998, p. 102). I decided to adopt a ‘foreignizing’ strategy in the sense that I did not want to assimilate the ST’s culture. This is because I believed that my reader, having chosen to read an anthology aiming at the exposition of Chilean culture, would want the cultural references to be preserved.

In this sense, I wanted to provide an ‘overt’ translation (House, 1997). House considers an overt translation to be one ‘in which the addressees of the translation text are quite “overtly” not being directly addressed’ (House, 1997, p. 66). She believes that the TT audience should be able to recognise that they are reading a translation because the ST is tied to the source culture. However, she maintains that the ST and TT should be equivalent ‘at the level of language/text, register (with its various dimensions) as well as genre’ (p. 112). My overall strategy reflects this distinction. I aim for equivalence in terms of register, genre, style and aesthetics (as set out in both Reiss’ and House’s strategies), however I want the reader to detect the existence of and the difference between the two discourse worlds.

2. Cultural references

2.1. Non-equivalence of culture-specific concepts

One of the challenges I faced when translating ‘El legado’ was finding an equivalent for culture-specific concepts without incurring too much loss. The narrator at one point lists the items that he took to his mother in the hospital. These items all seem run-of-the-mill for the ST audience, however it is difficult to find culturally equivalent objects in the target culture. He takes his mother colonia inglesa [paragraph 26]: a cheap body spray or splash that has a distinctive scent Chileans instinctively recognise. Mona Baker suggests that in these circumstances translators need to deal with semantic gaps by manipulating the hierarchical nature of a semantic field. If the hyponym does not exist in the TT, the translator can resort to the superordinate word (Baker, 1992). I decided to opt for a superordinate

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