Financial intermediation channels funds from savers to borrowers. Which statement best contrasts banks and nonbank intermediaries?

• A. Banks provide maturity transformation and payment services, while nonbanks include mutual funds, insurers, and finance companies.
• B. Banks lend only to governments; nonbanks lend to individuals.
• C. Financial intermediaries only trade securities; banks never hold deposits.
• D. Intermediation is limited to domestic markets; nonbanks operate internationally.

Answer: (A)