What does the term 'wholesale market' refer to in financial regulation?

The term 'wholesale market' refers to markets where financial instruments are traded in large quantities, typically between institutions rather than individual retail investors. This segment of the financial market is characterized by larger transactions and often involves the trade of securities, currencies, commodities, and derivatives among major financial players such as banks, mutual funds, and hedge funds.

In the wholesale market, the pricing of these instruments can differ significantly from the retail market due to the volume of trades and the lack of intermediaries, which often results in more favorable terms for the institutions involved. This market plays a crucial role in providing liquidity, price discovery, and risk management for larger entities, contributing to the overall efficiency of the financial system.

The other options do not accurately describe the wholesale market. The reference to small quantities pertains more to retail markets, while the exclusive focus on bonds in one choice limits the broader scope of instruments traded in wholesale markets. Similarly, markets that focus on consumer goods do not relate to the financial instruments and transactions that define wholesale trading.