Someone standing in the middle isn’t automatically wasteful. They’re being paid to absorb a risk you’d otherwise carry yourself.
A financial intermediary exists to solve a specific problem: two parties who want to transact but don’t fully trust each other, or lack the specialized ability to evaluate risk that the other has. Diamond and Rajan’s theory of banking frames this precisely — a bank’s fragility, its exposure to depositor withdrawal, is what commits it to actually performing the liquidity-creation and trust function it’s paid for, rather than the fee being pure extraction.
Removing intermediaries (“disintermediation”) only works if whatever function they were performing — verifying trust, absorbing default risk, providing recourse — gets handled some other way. A trusted circle with direct, mutual accountability is one such substitute; it doesn’t eliminate the underlying risk the intermediary was pricing, it relocates that risk-management function into the relationship itself.
Source: Diamond, D.W. & Rajan, R.G., “Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking,” Journal of Political Economy, 2001.