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A broad change in financial relationships characterized by a decline in the traditional deposit and lending relationship between banks and their customers and an increase in direct relationships between the ultimate suppliers and users of financing. The securitization of collateral, the rise of money market funds for investment of cash reserves, the growth of communications networks, and implementation of rigid bank capital requirements have all contributed to this trend. Disintermediation has drastically changed the roles played by various financial intermediaries and non-financial firms in the risk management process. See also Intermediation, Loan Participation, Securitization.
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