Financial Intermediation Essay Example | Topics and Well Written Essays - 2250 words

Financial Intermediation - Essay Example In addition, the study would also reflect about how the policymakers have made deliberate efforts to ease up different financial markets, encourage foreign competition and deregulate interest rates (Ariss, 2010). Globalisation is another issue in today’s economic concern. Increasing competitiveness would be the result of increasing the level of globalisation, as this tends to promote foreign investments by developing domestic businesses and improvising the performance of domestic banks. In relation to the above context, the study of Ariss (2010) mainly depicted the implications of changing banks’ structure and their prospects towards rapid development in contemporary world. Ariss (2010) reflected in the study that the banks could improve their profit efficiency with commanding a high price mark-up over the marginal costs, but it could not help in terms of cost efficiency levels. Apart from this, the study of Ariss (2010) also inferred that when the banks are able to gain market power, it can reduce various risks that emerge while performing distinct operations and likewise confirm firm stability. In this particular issue of stability, the study of Ariss (2010) discussed about the methodology of distinct economic variables including market power, regulatory environment, cost efficiency, sustainability in economic market and alternative efficiency with portfolio characteristics. The aforesaid study of Ariss (2010) indicated the acquisition process prevailing in the economic market including merger between domestic business and foreign investments or business to develop sustainability programme in competitive business setting of developing countries (Aris s, 2010). More importantly, with regards to the above context, the study of Ariss (2010) revealed that the occurrence of worldwide crisis in financial sectors would demonstrate the role of a country towards developing its uproar hitting financial