Lecture Money and banking - Lecture 21: Role of financial intermediaries presents the following content: Pool savings; safekeeping, accounting services and access to the payments system; liquidity, risk diversification, information services.
It is important to note that the requirements for sustainability condi-
tions vary by subsection because they are inherently different. In par-
ticular, these requirements to create sustainability may be more difficult
to achieve in practice in water and sanitation, in drainage, and in the
transportation subprojects than they are in building schools or clinics.
In this view of the saving-investment nexus, aggregate credit expansion comes before saving.
The process of credit-expansion here starts with the wish of an entrepreneur to get some
means of payment to invest into some new equipment or simply to buy intermediary products
or hire workers in order to star, expand or start production. The financial system with the
support of the central bank then expands the money supply ex nihilo (“out of nothing”) and
lends the newly created liquidity to the firms.