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Because eurodollars have fewer regulations (for good and for bad, such as FDIC reserve requirements) around them, eurodollar deposits can generate higher intere
by Karrot_Kream 4y ago
Because eurodollars have fewer regulations (for good and for bad, such as FDIC reserve requirements) around them, eurodollar deposits can generate higher interest rates than equivalent USD-denominated deposits. Saying a eurodollar is identical to a USD is a stretch as regulatory regimes, and as such risk, are different between them.
- lottin 4y agoI don't know that they have fewer regulations. Banking regulations follow the guidelines set by the Basel Committee on Banking Supervision and as a result are very much the same across the developed world. Also it's absolutely not true that looser regulations result in higher interest rates.