Toward enhancing financial institutions’ financial intermediation Financial institutions are expected to actively elicit positive activity from firms and households, instead of passively waiting for such activity, and to work to enhance their capability for financial intermediation.
This will raise the added value of their financial intermediation, and enable them to secure borrower firms without competing to reduce interest rate margins on loans and increase their profits as a result. At the same time, from a macroeconomic perspective, enhancing the capability for financial intermediation will bring about favorable conditions for a virtuous cycle to operate between financial and economic activity.