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 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. Therefore, banks have been labeled as "financial department stores", and some of the original classifications of banks have become vague 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 at different times.
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 book 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 Guaranty (a subsidiary of commercial banks in JPMorgan Chase) and Bankers Trust in new york; In the United States; A "wholesale lending institution" is defined as "a bank that distributes the main part of its 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 provided 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 to issue large-scale degraded loans to companies and other relatively large commercial companies and institutions"; "Retail bank" is defined as "consumer-oriented bank, giving priority to domestic and small enterprises" and "retail credit" is defined as "small non-nationalized loans issued to individuals, families and small enterprises". )。 Before the 1930s, many banks in Europe were mainly engaged in wholesale business, mainly serving the government, large companies and large wealthy family groups. Tellers don't have isolation counters and consumer loans, so large-scale financing should be implemented cautiously. European wholesale banks have been mixed with securities, insurance and trust business, with the wholesale banking business of investment banks such as credit and securities underwriting of large companies as the 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 by using interest rates, currency options, futures and other credit instruments;
(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 fund-raising, 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 their 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 oriented to 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 goods;
(2) Providing investment consultation for private clients;
(3) Issuing credit cards, handling personal settlement, cash management and other businesses;
(4) Divide the securities purchased 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 services: entrusted by private customers to provide 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; Lending loans to individuals (excluding brokers and securities dealers) to buy or store securities; Real estate loans are used 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, while 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 variable interest rates more. There are also short-term, medium-term or long-term retail loans. Because most retail loans are short-term and short-term, 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, about 2,500 companies in the United States were engaged in investment banking, among which only about 50 investment banks headquartered in central cities such as new york, Boston, Chicago and San Francisco were 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 in fierce competition, wholesale banking 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. Fierce competition in retail business has been launched in many 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 and securities dealers mainly engaged in securities brokerage business); 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 carry out retail business. For example, in 198 1 year, net loans issued by financial companies to new consumers accounted for 72%, while commercial banks only accounted for 3%, and the proportion of wholesale banks was even less. Due to the fierce competition in retail business, the market share of retail business of various institutions changes rapidly.