The process of removing money from a financial intermediary in order to earn a higher yield somewhere else, usually with another financial intermediary. Historically, disintermediation, through policy loans or surrendered policies, has been a major problem for life and health insurers during periods of economic depression and high inflation.----------[ Back
The process of removing an intermediary from a transaction. Many internet companies bypass traditional retail channels and sell directly to the customer. Also, the flow of funds out of banks and savings institutions and into short-term investments which have higher returns.
Term used originally to describes the process whereby customers did not include the often-used intermediary, the bank to complete a transaction. Customers withdrew funds from traditional bank savings and checking accounts and placed them in alternative accounts outside the banking industry (i.e., investment accounts at brokerage firms). In other words, this term refers to the outflow of deposit funds from banks into other types of financial institutions or investments (mutual funds, the stock markets). Disintermediation also may refer to the frequent occurrence in which banks' traditional corporate customers go directly to the bond market rather than borrowing from domestic banks.
The process of individuals investing their funds directly instead of placing their savings with banks, savings and loan associations and similar institutions for investment by such institutions. This bypassing of financial institutions occurs when proportionately higher yields are available on secure investments (such as high-grade corporate bonds, money market funds and government securities) than can be obtained on savings deposits.
The process of excluding banks and other financial institutions from the collection and allocation of financial resources in the economy. Disintermediation may take different forms, for example the decision of companies to rely on bond and Equity issues rather than on bank loans to finance their activities. Français: Désintermédiation Español: Desintermediación
The removal of the middleman from a transaction involving a producer and a consumer, usually through digital transactions on the Internet.
the elimination of intermediaries in the supply chain, also referred to as "cutting out the middlemen."
removing the layers of intermediaries between sellers and buyers.
The process of doing away with middlemen from business transactions.
Business arrangement in which there is no middleman in a transaction.
the connecting of producers and consumers directly, cutting out the intermediaries such as wholesalers, distributors and retailers. (p. 287)
The withdrawal of funds that were previously invested through financial intermediaries, so that they can be invested directly into financial markets. Example: consumers take money out of banks and thrifts and invest it in money markets because of the higher interest rate.
When individuals (or other entities) take money out of savings accounts and put the funds in money market accounts.
The process of bringing a company closer to its customer by cutting out the information middleman.
The substitution of direct transactions for those that are mediated. The term originated when rising interest rates caused savings to be withdrawn from banks—whose interest rates were capped—and invested in money market instruments that were the direct debts of borrowers. Banks were disintermediated. In electronic commerce, the term refers to the rise of direct buyer-to-seller relationships over the Internet, disintermediating wholesalers and retail outlets.
The process wherein moneys are withdrawn from financial intermediaries (e.g., the banking system). The instigation for this process may be non-competitive returns offered by the intermediary, uncertainty or a variety of other reasons, resulting in a shrinkage in credit for the system as a whole.
The flow of funds out of savings institutions into short-term investments in which the interest rates are higher. This shift normally results in a net decrease in the amount of funds available for long-term real estate financing. Also, the market condition that exists when the shift occurs.
The practice of cutting out the middleman to achieve convenience, savings and fast turn-around time for consumers. Refers to the bypassing of traditional retail channels for direct selling by Web-based companies.
A phenomenon in which customers remove money from a financial intermediary. See also run on assets.
Used to describe the elimination of intermediaries from a business process, often in service industries, where a company makes transactions directly with its customers. Examples include airline companies selling tickets direct to passengers over the Web, and the replacement of bank branches with online banking. related index entries: E-COMMERCE or ELECTRONIC COMMERCE
Rapid withdrawal of money from savings accounts.
The flow of funds out of savings institutions into alternative investments on which interest rates are higher.
the removal of intermediaries in a supply chain.
The withdrawal of monies from a low yielding financial intermediary, such as a bank saving account, and the reinvestment into other, higher yielding securities.
The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers. In particular it enables a company to sell direct to the customer by 'cutting-out the middleman'. The reverse of disintermediation is Reintermediation.
The removal (or obsolescence) of one or more intermediary roles on the value chain between manufactures and consumers. An examples is Hewlett-Packard's creation of a Web site that sells direct to end users, thereby circumventing its traditional resellers.
When the traditional sales channels are broken; the middleman gets cut out of the deal.
The withdrawal of money from low yielding financial accounts, such as saving accounts, and the reinvestment into higher yielding securities such as Treasury bills. Banks, in an effort to keep the money, may pay depositors higher rates. In order to afford the higher rate, banks will then charge their borrowers higher interest rates. This can possibly lead to tight money and reduced economic activity.
Systemic trend of the withdrawal of funds from intermediary financial institutions, in order to directly access investment products offering higher returns.
The process by which producers and consumers are brought closer together, making middlemen redundant. This ugly word, borrowed from the banking world, is especially relevant to Internet technologies which allow their users direct access to information that might otherwise require a mediator.
It occurs when depositors make sudden withdrawals of large sums of money deposited with their financial institutions, such as Savings and Loan Associations, Commercial Banks or Mutual Savings Banks.
