How do financial institutions and the Federal Reserve support financial intermediation?

"An operating license issued to a bank by the federal government or a state government; required for a commercial bank to do business. Profit-oriented financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services. Not-for-profit, member-owned financial cooperatives. An independent, quasi-public corporation backed by the full faith and credit of the U.S. government that insures deposits in commercial banks and thrift institutions for up to a ceiling of $250,000 per account. The central bank of the United States; consists of 12 district banks, each located in a major U.S. city. The process in which financial institutions act as intermediaries between the suppliers and demanders of funds. Large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members. Depository institutions formed specifically to encourage household saving and to make home mortgage loans."