1st – The relevance of banking activity in modern economies Credit institutions play an important intermediation role between savers and investors, centralising the resources of the former and channelling them to the funding of investment. This financial intermediation between savings and investment leads to: 1. Maturity transformation – deposits with typically short maturities are transformed into longer-term credits; and  2.
Liquidity transformation – deposits, liquid, are transformed into credits, more illiquid. Through financial intermediation, benefits may be reaped of a scale effect when mobilising savings: multiple low-value individual deposits are transformed into large credit amounts, allowing for the financing of large-scale investments. Finally, savings obtained in a given region (or country) may be channelled to finance investments in other regions (or countries).