Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments because
FIs can diversify away some of their risk.
FIs closely monitor the riskiness of their assets.
the federal government requires them to do so.
FIs can diversify away some of their risk and closely monitor the riskiness of their assets.
FIs can diversify away some of their risk and the federal government requires them to do so.