Question

Banks and other financial institutions channel money from to borrowers to investors.

Answer 1

This statement is false. Actually the correct version would be exactly the opposite: Banks and other financial institutions channel money from to INVESTORS to BORROWERS.

Investors deposit money in the bank by the purchase of financial products of very different kinds (savings account, shares, private or public debt, etc). The bank pays some return for this money and, in turn, uses it to lend money to customers who come for a loan or a mortgage (for example). These borrowers need to pay a fee to the bank to obtain the money resquested. The fee is actually a percentage of the total amount lent and it is called interest.