Financial intermediaries are common throughout the financial world. A financial intermediary is an institution that borrows money from people who have saved and which, in turn, provides loans to others, acting as an intermediary between investors and companies raising funds. Common institutions that conduct intermediary actions include commercial banks, credit unions, insurance companies, mutual funds, and financial companies. These institutions are integral to the overall health and functionality of the global financial market. The functions performed by financial intermediaries can be classified into three functions: (1) maturity transformation, (2) risk transformation, and (3) convenience naming. With maturity transformations, intermediaries convert short-term liabilities into long-term assets. This conversion is common among banks and other institutions that provide liquidity to entrepreneurs, matching short-term debt with a long-term loan. Rather than constantly evaluating short-term loan options and rolling over the debt balance, it is possible to make a longer-term commitment guaranteeing a lower rate for the benefit of all parties. Additionally, intermediaries can provide risk transformation, which provides the opportunity to convert risky investments into relatively risk-free investments by lending to multiple borrowers to spread the risk. By pooling funds from multiple investors, the intermediary – such as a mutual fund – inherently provides diversification and tolerance for a single investment producing undesirable results. Finally, the naming of convenience is ensured by an intermediary. With a large amount of deposits held with a financial intermediary, they are able to match small deposits with large loans, and larger deposits... middle of paper ... the economy as a whole; it maintains the cycle of money circulation, investing in businesses to fuel growth. When a middleman reaches the size of Berkshire ($113 billion market cap), one has to be careful about where the money goes. It can be easy for the intermediary to flirt with the possibility of becoming a monopoly in certain markets or sectors due to the influx of investment and ownership percentage. During an economic recovery, it is often easy to follow the big middlemen and expect them to “turn the tide” and lead the economy out of recession. The danger arises when people start expecting a silver bullet approach and start focusing only on these large institutions; having this tunnel vision does not always allow for faster growth and/or recovery. Overall, with all aspects considered, Berkshire Hathaway as an intermediary is beneficial to the overall economy..