Wholesale banking refers to the financial system of monetary transaction between two big institutions. Under wholesale banking, services are provided only to government agencies, funds for pension, corporations having strong financials, and institutional customers. These services include cash management, leasing of equipment, big loans, merchant banking as well as trust services. Wholesale banking between two institutional banks takes place on the internet market which often involve huge amount of money.
In addition to traditional retail banking services, many standard banks offer wholesale banking and function as merchant banks. This basically implies that an individual in search of wholesale banking could join in the same bank where he controls his very own retail banking instead of going to a special institution. Modern wholesale banks engage in the following:
• Underwriting
Large specialist monetary organizations like banks and insurance houses offer these services whereby payment in case of any financial loss is guaranteed and they accept the monetary risk for accountability that may arise from such guarantee. An underwriting settlement is usually created in situations like insurance, issues related to securities in primary markets.
• Wholesale financing
Banks usually rely on customer deposit to offer money that it can give away as loans to its borrowers. With the help of wholesale financing banks borrow additional money that can later be used to expand the business of lending funds above the level of deposits and accelerate interest earnings.
• Market making
A market maker, often termed as a liquidity provider, is an individual or a company that cites both buying price and selling price in a financial instrument in order to make profit on the turn.
• Mergers and Acquisitions (M&A)
These are transactions which combine the ownership of companies, business organizations, or their operating units. M&A allow an enterprise to grow, shrink, and change the nature of their business or competitive position.
• Fund management
Fund management basically means any system that monitors and maintains valuable things to an entity or group.
An easy way to think of wholesale banking is to consider it as a discount store that deals in such huge sum of money that it can present special prices or lowered fees. Large organizations, institutions with huge amount of asset, or business agreements usually benefit more from wholesale banking than from retail banking.
In addition to traditional retail banking services, many standard banks offer wholesale banking and function as merchant banks. This basically implies that an individual in search of wholesale banking could join in the same bank where he controls his very own retail banking instead of going to a special institution. Modern wholesale banks engage in the following:
• Underwriting
Large specialist monetary organizations like banks and insurance houses offer these services whereby payment in case of any financial loss is guaranteed and they accept the monetary risk for accountability that may arise from such guarantee. An underwriting settlement is usually created in situations like insurance, issues related to securities in primary markets.
• Wholesale financing
Banks usually rely on customer deposit to offer money that it can give away as loans to its borrowers. With the help of wholesale financing banks borrow additional money that can later be used to expand the business of lending funds above the level of deposits and accelerate interest earnings.
• Market making
A market maker, often termed as a liquidity provider, is an individual or a company that cites both buying price and selling price in a financial instrument in order to make profit on the turn.
• Mergers and Acquisitions (M&A)
These are transactions which combine the ownership of companies, business organizations, or their operating units. M&A allow an enterprise to grow, shrink, and change the nature of their business or competitive position.
• Fund management
Fund management basically means any system that monitors and maintains valuable things to an entity or group.
An easy way to think of wholesale banking is to consider it as a discount store that deals in such huge sum of money that it can present special prices or lowered fees. Large organizations, institutions with huge amount of asset, or business agreements usually benefit more from wholesale banking than from retail banking.
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