The above description, though, does not immediately make it clear why we need banks to do this intermediation function – why the savers cannot directly lend to the borrowers, and why we need an intermediation infrastructure. The answer is that the information asymmetry inherent in such relationships makes direct monitoring by individual savers of borrowers both costly and inefficient.
This most certainly does not mean that the National Bank of Serbia should not act in coordination with the Government. To the contrary, joint work on achieving and maintaining a low rate of inflation will yield the optimal result.