This is a method to classify banks into wholesale banks, retail banks, wholesale/retail banks, private banks and shadow banks according to business types. Since 1980s, with the financial deregulation becoming a trend, the function of banking services has been extended to provide all-round financial services to meet all the needs of customers, including credit, trust, insurance, securities underwriting and brokerage, investment services, payment intermediary, personal finance and savings. As a result, banks have been labeled as "financial department stores", and some of the original classifications of banks have become blurred in concept. Therefore, some people think that this classification method based on business type is the most reliable among various classification methods. As for the definition of "wholesale bank", it is different because of the different supervision of banking business in different countries in different periods.
The definition of "wholesale banking" in the English-Chinese Dictionary of International Finance is: "Wholesale banking refers to the huge loan of funds between banks, which is different from the traditional retail banking between banks and their customers. In the management of commercial banks, Peter Ross defines "wholesale banks" as "large city banks that mainly provide financial services for companies and other institutions", such as Morgan Guarantee (a commercial bank subsidiary of J.P. Morgan) and Bankers Trust)； in new york; In the United States; "Wholesale lending institutions" are defined as "banks that distribute the major part of their credit funds to companies and other relatively large enterprises and institutions in the form of large loans". Accordingly, "retail bank" is defined as "a consumer-oriented bank that mainly provides services for families and small businesses"; Define "retail loans" as "small loans to individuals, families and small businesses" (note: the original definition of "wholesale banks" is "large metropolitan banks that mainly provide financial services to companies and other institutions"); The definition of "wholesale lending institution" is "a bank that uses most of its infrared portfolio for large loans to companies and other relatively large commercial companies and institutions"; The definition of "retail bank" is "consumer-oriented bank, which gives priority to selling its services to domestic and small enterprises" and "retail credit" is defined as "small non-nationalized loans to individuals, families and small enterprises". )。 Before 1930s, many banks in Europe were wholesale banks, mainly serving the government, large companies and groups owned by large wealthy families. Tellers have no isolation counters, no consumer loans, and large financing is carefully implemented. Wholesale banks in Europe have been operating in a mixed business of securities, insurance and trust, with the wholesale banking business of investment banks such as credit and securities underwriting of large companies as their main business, such as Deutsche Bank and UBS Group AG. In Britain, businesses similar to wholesale banks are called commercial banks. The object of wholesale business is large industrial and commercial enterprises and institutions, and the single business volume is large. Wholesale business mainly includes:
(1) Absorb deposits from institutions such as agriculture, construction, industrial and commercial enterprises, banks, insurance companies and finance companies, and provide large loans, trade financing and syndicated loans;
(2) Raising large sums of money in the money market, engaging in foreign exchange transactions, and providing risk management services for credit instruments such as interest rates, currency options and futures;
(3) Providing consulting and financing services for enterprises, financial institutions and government departments, including stock and bond issuance and new product development consulting, assisting in financing, formulating stable financing strategies and providing underwriting services;
(4) Providing consultants for the company's project financing, mergers and acquisitions, capital restructuring and privatization, as well as bond and stock underwriting and credit;
(five) to assist customers to enter the international capital market to raise funds, accept large transactions of various financial products and derivatives such as currencies, stocks, bonds and futures entrusted by enterprises and institutions, and carry out financial engineering and risk management;
(six) to accept the entrustment of enterprises and institutions in the stock and bond markets and to act as agents for large transactions between institutions;
(seven) underwriting national debt and municipal bonds;
(eight) to carry out self-investment business, manage diversified securities portfolios, make use of domestic and foreign money markets and capital markets, and engage in investment and trading of various financial instruments. The retail business of banks is aimed at individual consumers and small private enterprises, and the single business volume is small. To sum up, there are mainly the following aspects:
(1) Absorb small deposits for consumers and small private enterprises such as farms and pastures, and provide commercial loans such as automobiles, houses and household items;
(2) Providing investment consultation for private clients;
(3) Issuing credit cards and handling personal settlement, cash management and other businesses;
(4) Divide the securities bought in large quantities from large commercial banks and securities companies into smaller denominations for sale, and conduct securities transactions with small enterprises and individual investors;
(5) Retail brokerage service: entrusted by private customers, it provides trading orders, custody services (commonly known as holding shares on behalf of them), and customer credit services such as margin and transaction extension.
Loan is one of the most important functions of commercial banks, so it is an important issue to distinguish between wholesale loans and retail loans. The definition of "retail loan" in China Financial Dictionary is: "loans granted by commercial banks to individuals. Mainly includes consumer loans issued to consumers for purchasing durable consumer goods or paying various fees; Loans to individuals (excluding brokers and securities dealers) to buy or store securities; Real estate loans for consumers to buy real estate such as houses. " The definition of "wholesale loan" is: "loans granted by commercial banks to industrial and commercial enterprises, financial institutions, social organizations, government departments and other legal persons. It mainly includes industrial and commercial loans, loans from financial institutions, real estate loans (except consumer real estate loans), securities trading loans from brokers or dealers, and farm loans (agricultural production loans).
Wholesale loans and retail loans are different according to different loan objects. Wholesale loans are for large industrial and commercial enterprises and institutions, and retail loans are for individual consumers and small private enterprises. Wholesale loans can be mortgage loans or unsecured loans, and the term can be short, medium or long. For wholesale loans with large amount and long term, they face greater interest rate risk than retail loans, so they use floating interest rates more. Retail loans can also be short-term, medium-term or long-term. Because most retail loans are short-term and long-term loans are relatively few, most of them use mortgage loans and fixed interest rates, and some unsecured personal consumption loans with floating interest rates have also been developed.
In the wholesale business, the connections and differences between wholesale banks and other banks and financial institutions are as follows: the market competition of wholesale business is mainly not the competition of price and service quality, but the comparison of overall competitive strength. Wholesale business is concentrated in a few large commercial banks and investment banks as wholesale banks. Although commercial banks, securities companies and other non-bank financial institutions are also engaged in wholesale business, only a few large investment banks and commercial banks are mainly engaged in wholesale business or only undertake wholesale business as wholesale banks. For example, during the period of 1984, there were about 2,500 companies engaged in investment banking in the United States, of which only about 50 were headquartered in central cities such as new york, Boston, Chicago and San Francisco, mainly engaged in the wholesale banking business of securities issuance and underwriting. Other investment banks include investment banks, commercial banks, securities brokerage companies and life insurance companies. With the decrease of investment banks and commercial banks with fierce competition, the wholesale banking business tends to be centralized.
In the retail business, the connections and differences between wholesale banks and other banks and financial institutions are as follows: the 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 the nature of wholesale banks have a small market share in retail business, and their retail business mainly provides convenience for all-round services required by wholesale business objects. The fierce competition in retail business is carried out among various financial institutions. Take the financial structure of the United States during the period of separate operation as an example. There are various financial institutions in the United States, including: investment banks mainly engaged in securities issuance and underwriting, brokerage companies mainly engaged in securities brokerage, and securities dealers); Mainly engaged in securities trading; Deposit intermediaries include: commercial banks, savings and loan associations, mutual savings banks and credit cooperatives. Contract financial institutions include: bank trust department, real estate investment trust company, investment company, etc. Among the above financial institutions, the subsidiaries of commercial banks and investment banks, as well as non-bank financial institutions such as pension funds, insurance companies and mutual funds all carry out retail business. In addition, emerging non-financial companies and money market funds can also conduct retail business. For example, 198 1 year, the net loans issued by financial companies to new consumers account for 72%, while commercial banks only account for 3%, and wholesale banks account for even less. Due to the fierce competition in retail business, the market share of retail business of various institutions changes rapidly.