“Intermediation” means brokering or bringing people together. What a wonderful idea! In the financial world intermediaries borrow from those how have it and lend to those who don’t, sitting in the middle to manage the timing, information, risks and size of deals that individual players couldn’t cope with. Banks are intermediaries, for example.

“Disintermediation”, on the other hand, means taking these loops out of the chain – cutting out the middle man. Providers and suppliers can deal directly with each other and thereby cut out the costs. What a wonderful idea! The housing association Places for People, for example, recently raised £175 million through a bond that bypassed the banks. John Lewis issued a 5 year bond direct to staff and customers, completely cutting out the banks. ‘P2P’ lending platforms like Zopa and Kiva allow individual lenders and borrowers to come into direct contact, crowd-funding and community share issues are gathering steam.

So, intermediation or disintermediation? Whose side are you on?

With the great and the good from the Social Investment Taskforce who talk about the “need for intermediation”? With Monitor and the Global Impact Investing Network who say the ”lack of intermediation capacity is one of the most significant challenges limiting the ability of investors to find and place capital”? And Social Finance who argue that “a range of market intermediaries is necessary to connect organisations seeking social investment and those seeking to invest”?

Or on the side of community investment with Zopa who argue that “with no banks in the middle, everyone gets better rates”? With Toby Blume who argues for “a more localised banking system… and stronger links between capital and places”? Or with Bill Gates who has said “the world needs banking but it doesn’t need banks”?

Perhaps it isn’t as simple as that. Perhaps in some markets we need to join the dots – where we’re wasting opportunities to make deals that could be happening. Yet in others we need to unscramble the mess - investment banks as intermediaries intermediating with other intermediaries (!) amplifying the risks and costs of failure.

And sometimes maybe it's about intermediation with a human face. At the supermarket checkout, for example, where a human connection can offer a much better service than those baffling self-service machines that can’t cope if you bring your own bag.