​KembaraXtra- Financial Terms- agency refers to a relationship in which one party, known as the principal, authorizes another party, called the agent, to act on its behalf.


Agency relationships arise in many financial and commercial situations, such as when a bank purchases securities for a customer or when a person grants power of attorney to another individual.


The term agency may also refer to an organization or person that provides agency services for clients or businesses.


In the United States, agency can additionally describe securities issued by organizations outside the Treasury Department, such as the Government National Mortgage Association.


The term is also used in banking to describe a bank that organizes and coordinates lending arrangements among multiple banks for corporate borrowers.