Bank wholesale business refers to financial activities that engage in large-amount financing intermediaries in the money market and capital market. Its targets are large industrial and commercial enterprises and institutions, and the single business amount is large. Financial institutions primarily engaged in wholesale business are wholesale banks. Due to different financial control models in different countries and different historical periods, the development status of wholesale banks and their status and organizational forms in the entire financial structure are also different. After China's accession to the WTO, the first impact of foreign banks on China's banking industry was in the field of wholesale business, which brought both opportunities and severe challenges to Chinese banks operating wholesale businesses. People must learn from and absorb the advanced experience and successful practices of wholesale banking and wholesale banking business in Western countries through change and innovation, and successfully apply them in practice before foreign banks can fully carry out wholesale business in China. In the Western banking industry, wholesale banking, wholesale financing, wholesale lending, wholesale banking, etc. are frequently used concepts. In China, the concepts of "wholesale" and "retail" business of banks have gradually become widely used.

The classification of banks into wholesale banks, retail banks, wholesale/retail banks, private banks and shadow banks is based on the bank's business A way to classify types. Since the 1980s, as financial deregulation has become a trend, the functions of banking services have expanded to include providing credit, trust, insurance, securities underwriting and brokerage, investment services, payment intermediaries, personal finance, savings, etc. to meet all customer needs. Financial services have led to banks being labeled as "financial department stores", making some of the original classifications of banks conceptually blurry. Therefore, some people believe that among various classification methods, this method of classifying according to business type is the most reliable. As for the definition of "wholesale banking", it varies due to differences in the regulation of banking business in different countries at different times.

The definition of "wholesale banking" in the "English-Chinese International Finance Dictionary" is: "Wholesale banking refers to the borrowing and lending of huge amounts of money between banks, which is different from the traditional way between banks and their customers. "The retail banking industry that constitutes the retail banking industry." Peter Rose in "Commercial Bank Management" defines "wholesale banks" as "large-scale urban banks that mainly provide financial services to companies and other institutions", such as Morgan Guaranty Trust Company in New York. Guaranty, the merchant banking subsidiary of J.P. Morgan & Co., and Bankers Trust; defines a “wholesale lender” as one who “extends a substantial portion of its credit funds in the form of large loans to corporations and other relatively large banks for enterprises and institutions.” Accordingly, "retail banks" are defined as "consumer-oriented banks that provide services primarily to households and small businesses"; "retail loans" are defined as "smaller amounts of loans made to individuals, households, and small businesses" ( Note: The original text defines "wholesale banks" as "Large metropolitan banks that offer financial services, mainly to corporations and other institutions"; "wholesale lenders" is defined as "Banks that devote the bulk of their creditportfolios to large—denomination loans extended tocorporations and "otherrelatively large business firms and institutions"; define "retail banks" as "Consumer-orientedbanks that sell the majority of their services to households and smaller businesses"; define "retail credit" as "Smaller-denomination loans exetended to individuals and families as well as to small businesses”.). Before the 1930s, many banks in Europe were wholesale banks mainly engaged in wholesale business. They mainly served the government, large companies and large wealthy family groups. They had isolated counters without cashiers, did not issue consumer loans, and prudently implemented large-amount financing. .

Wholesale banks in Europe have always practiced mixed operations with securities, insurance, and trust businesses, focusing on wholesale banking businesses of an investment banking nature such as large corporate credit and securities underwriting, such as Deutsche Bank and UBS. In the UK, businesses similar to wholesale banking are called merchant banks. The targets of wholesale business are large industrial and commercial enterprises and institutions, and the single business amount is large. The wholesale business mainly includes:

(1) Taking deposits from agriculture, construction, industrial and commercial enterprises, banks, insurance companies, finance companies and other institutions, and providing large loans, trade financing and syndicated loans;

(2) Conduct large-amount financing in the money market, engage in foreign exchange transactions, and provide risk management services with interest rates, currency options, futures, and other credit instruments;

(3) Provide services to enterprises, finance Institutions and government departments provide consulting and financing services, including providing consulting for stock and bond issuance and new product development, assisting in financing, formulating stable financing strategies, and providing underwriting services;

(4) Provide services to the company Provide consulting services in project financing, mergers and acquisitions, capital restructuring and privatization, as well as bond, stock underwriting and credit;

(5) Assist clients in accessing the international capital market to raise funds and accept entrustment from enterprises and institutions. Carry out financial engineering and risk management for large-volume transactions in various currencies, stocks, bonds, futures, and other financial products and derivatives;

(6) Accept enterprises and institutions in the stock and bond markets Entrust, large transactions between agencies;

(7) Underwrite treasury bonds and municipal bonds;

(8) Carry out self-operated investment business and operate diversified securities portfolios, Utilize domestic and foreign currency markets and capital markets to engage in investments and transactions in various financial instruments. Bank retail business targets individual consumers and private small businesses, and the single business volume is small. To sum up, the main aspects are as follows:

(1) Accept small deposits from consumers and private small businesses such as farms and ranches, and provide commercial loans for cars, houses, household goods, etc.;

(2) Provide investment consulting for private clients;

(3) Issue credit cards, handle personal settlement, cash management and other services;

(4) From large commercial Securities purchased in large quantities by banks and securities companies are divided into smaller denominations for sale, and securities are traded with small businesses and individual investors;

(5) Retail brokerage services: accept private customer entrustment to provide purchase and sale orders, and custody Services (commonly known as holding shares on behalf of others), as well as margin and transaction extension customer credit services, etc.

Issuing loans is one of the most important functions of commercial banks, so the distinction between wholesale loans and retail loans is an important issue. The definition of "retail loan" in "Chinese Financial Dictionary" is: "Loans issued by commercial banks to individuals. It mainly includes loans issued to individual consumers for purchasing durable consumer goods or paying various expenses. Consumer loans; loans to individuals (excluding brokers and securities dealers) to purchase or store securities; real estate loans to individual consumers to purchase real estate such as residences." The definition of "wholesale loan" is: "Loans issued by commercial banks to legal persons such as industrial and commercial enterprises, financial institutions, social groups, government departments, etc. It mainly includes industrial and commercial loans, loans to financial institutions, and real estate loans (consumer loans). (except real estate loans), broker or dealer securities transaction loans and farm loans (agricultural production loans), etc.”

Wholesale loans and retail loans are distinguished based on different loan objects. Wholesale loans are targeted at large industrial and commercial enterprises and institutions, while retail loans are targeted at individual consumers and private small businesses. Wholesale loans can be secured or unsecured, and terms can be short, medium or long term. For wholesale loans with large amounts and long terms, they face greater interest rate risks than retail loans, so variable interest rates are often used. Retail loans can also be short-term, medium-term or long-term. Since most retail loans are short- to medium-term and there are relatively few long-term loans, most of them adopt mortgage loans and fixed interest rates. Some unsecured floating rate personal consumption loans have also been developed.

In terms of wholesale business, the connection and difference between wholesale banks and other banks and financial institutions are as follows: market competition in wholesale business is not mainly about price and service quality, but about the comparison of overall competitive strength. Wholesale business is concentrated on a small number of large commercial banks and investment banks that serve as wholesale banks. Although commercial banks, securities companies and some other non-bank financial institutions are also engaged in wholesale business, only a few large investment banks and commercial banks are wholesale banks mainly engaged in wholesale business or only undertake wholesale business. For example, in 1984, there were about 2,500 companies in the United States undertaking investment banking business, of which only about 50 investment banks headquartered in central cities such as New York, Boston, Chicago, and San Francisco were mainly engaged in wholesale banking business of securities issuance and underwriting. Other investment banking businesses include wholesale and retail investment banks, commercial banks, securities brokerage companies and life insurance companies. As investment banks and commercial banks show a trend of reduction in number and expansion in scale amid fierce competition, wholesale banking business also tends to be concentrated.

In terms of retail business, the connection and difference between wholesale banks and other banks and financial institutions are as follows: competition in the retail business market mainly depends on the price and service quality of financial products purchased by customers, rather than the overall competitive strength. . Commercial banks and investment banks with a wholesale banking nature have a small market share in the retail business. Their retail business is mainly to provide convenience for the full range of services required by wholesale business objects. Fierce competition in the retail business occurs among a wide range of financial institutions. Take the financial structure during the period when the United States implemented separate operations as an example. There are various financial institutions in the United States, large and small. Among them, institutions engaged in securities business include: investment banks mainly engaged in securities issuance and underwriting; Brokerages engaged in securities brokerage business, securities dealers mainly engaged in securities transactions; depository intermediaries include: commercial banks, savings and loan associations, mutual savings banks, credit unions, etc.; contract finance Institutions include: bank trust departments, real estate investment trust companies, investment companies, etc. Among the above-mentioned financial institutions, commercial banks and investment banking subsidiaries, as well as non-bank financial institutions such as pension funds, insurance companies and mutual funds, conduct retail business. In addition, emerging non-financial companies and money market funds can also conduct retail business. For example, in 1981 financial companies accounted for 72% of net new consumer loans, while commercial banks accounted for only 3% and wholesale banks accounted for even less. Due to the fierce competition in retail business, the market share of retail business of various institutions changes rapidly.