tailieunhanh - Changes In Financial Inter Mediation: The Role Of Pension And Mutual Funds

At the same time, you’ll work with the analysts to increase return. That means that you’ll concentrate on the creditworthiness of the issuers of both commercial paper and CDs,which offer higher yields. You’re probably going to try to buy as many of these issues as possible—assuming that the analysts can verify that the investments are high quality. Your fund has the flexibility to invest in a wide range of securities, and your competitors are doing just that, looking for higher returns. To keep risk in check, you’ll diversify broadly, with position sizes of 1 percent or less of the assets under management. In fact, many portfolio managers will seek. | Changes in Financial Intermediation The Role of Pension and Mutual Funds By Gordon H. Sellon Jr. Since the late 1970s the . financial system has undergone considerable sfress. Many traditional intermediaries such as thrifts banks life insurance companies and investment banks have suffered large losses and some have failed. Most analyses of these problems have focused on the difficulties of these institutions in adapting to the inflationary environment of the 1970s and 1980s. Some of the problems of these ưaditional intermediaries have deeper roots however. Over the postwar period the rapid growth of pension and mutual funds has increased competition for household savings. While competition has opened up new business opportunities for some traditional intermediaries it has undermined the profitability of others. As a result many traditional intermediaries have been forced to adapt to new roles in the financial system. This article examines the impact of pension and mutual funds on the postwar financial system. Recognizing theừ influence is important both for understanding the causes of recent financial problems and for deciding what regulatory changes might be appropriate to ensure the future Gordon H. Sellon Jr. is an assistant vice president and economist at the Federal Reserve Bank of Kansas City. Dan Roberts an assistant economist at the bank assisted in the preparation of this article. health of the financial system. The first section of the article describes the growth of pension and mutual funds over the postwar period and their increasing importance in the financial system. The second section examines how their success has undermined or enhanced the fortunes of traditional intermediaries. The thừd section describes how pension and mutual funds have affected the overall intermediation process and examines some of the implications for financial regulation. THE RISE OF PENSION AND MUTUAL FUNDS By offering greater portfolio diversification and professional .