Premium
ERODING MARKET IMPERFECTIONS, REINTERMEDIATION, AND DISINTERMEDIATION
Author(s) -
Easterwood John C.,
Morgan George Emir
Publication year - 1991
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1991.tb00672.x
Subject(s) - disintermediation , intermediary , intermediation , financial intermediary , business , financial system , industrial organization , finance , monetary economics , economics
In this paper a search model of a financial market, generalized to include costly contracting, is employed to demonstrate that: (i) relative cost efficiency for an intermediary is not sufficient to explain a role for intermediation services, and (ii) eroding market imperfections do not produce hypothesized effects on “reintermediation” from traditional depository‐type intermediaries to brokerage‐type intermediaries and on “disintermediation” from indirect financing to direct financing under a set of justifiable assumptions.