Wholesale banking refers to banking and financial services provided to major clients such as large corporations, other banks and government agencies. As opposed to retail banking which primarily services individual and small business customers, wholesale banking services are catering to a much larger and more varied customer base.

The most common services provided by wholesale banking are mergers and acquisitions, consulting, currency conversion and underwriting. When dealing with large and complex organizations such as international banks or governments, wholesale banking offers access to vast resources and expert personnel. To facilitate this, many banks have specialized divisions devoted solely to this type of banking.

The reason banks engage in the practice of wholesale banking is to offset the risks associated with large-scale transactions. For example, when dealing with institutional banks, the risk of default can be high, meaning large losses may be incurred. Similarly, when selling financial or consulting services to large organizations, companies may be exposed to potential liability issues. In order to manage these risks, banks must utilize their specialized divisions to ensure that all transactions are in full compliance with laws and regulations.

Wholesale banking also refers to the borrowing and lending between institutional banks. In essence, this is the same as any other loan but with more stringent terms and conditions. This type of lending requires complete disclosure and transparency on the part of both parties. Generally, wholesale banking is riskier than traditional retail banking and carries more stringent regulatory requirements.

Overall, wholesale banking is an important part of the financial industry that helps facilitate complex transactions and ensures that all parties remain protected from potential losses. As the global economy becomes increasingly interconnected, the need for wholesale banking services will continue to grow and evolve. Banks must remain vigilant to ensure they are meeting all of their obligations while maintaining the highest ethical standards in their dealings with large customers.