When a financial system is in its formation period it at some point evolves into complex financial roles for all of the participants
. At its core it is composed of lenders and the people who borrow the money from the lenders. In the beginning this is done through direct lending.
An uncle would lend his nephew $10,000 for his dry-cleaning business. When a corporation needs a loan it does not have a rich uncle to borrow 10 million (but it does have to ability to take advantage of the best forex trading conditions). That is why we have financial intermediaries who act as the go-between for lenders and borrowers.
One of the services that a financial intermediary offers is known as currency transformation. Many US companies export goods and services to other countries, but few individuals living in the United States are willing to finance the overseas activities of these companies by buying direct financial claims denominated in a foreign currency. Financial intermediaries help to finance the global expansion of US companies by buying financial claims denominated in one currency and selling financial claims denominated in other currencies. These transnational transactions also have a large overhead as there are costs involved as well as legal implications but news about them are often some of the best forex trading tips. There is not a direct lender who could achieve economies of scale the way that a financial intermediary could when it comes to global business transactions.
This is one of many services that are provided by financial intermediaries. Because they do these types of transactions day after day on a large scale they can afford the overhead associated with them and provide a valuable service to corporations who are conducting business in other countries. The exchange of currencies and assets from one country to another is a complex issue and can also involve mergers as well as acquisitions in name only when a government does not allow other nations to own assets. A business that can provide assistance in this matter is quite valuable indeed.