Definitions (2)
1. Reduction in a bank's loan portfolio (its primary asset and major source of income) as loans are paid-off and the new loans either do not fill the gap or are contracted at lower interest rates.
2. Withdrawal of cash from banks by depositors (during periods of low interest rates) to invest in bonds, stocks (shares), and mutual funds (unit trusts) that yield higher returns. See also disintermediation.
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