Functionally, the two assets are the same to John, but while John's deposit at Chase was a demand deposit, his deposit at Citibank in London is a Eurodollar deposit
It is surely significant that the Eurodollar deposit
market emerged in the 1960s when the Soviet Foreign Trade Bank deposited its surplus dollars in London and Paris bank to prevent Cold Warasset sequesters.
domestic deposit rates are lower than comparable maturity Eurodollar deposit
rates because domestic time deposits are subject to Federal Reserve Bank reserve requirements and Federal Deposit Insurance Corporation (FDIC) fees and Eurodollar deposits
Figure 2 focuses on the difference between the yield on a three-month eurodollar futures contract with three months to maturity and the actual eurodollar deposit
Such a Finding would be consistent with a higher premium on eurodollar deposit
yields relative to Treasury securities.
dollar deposited in a bank's Grand Cayman branch is a eurodollar deposit
The creation of a Eurodollar deposit
may be illustrated best by a streamlined example:(14) IBM Corporation decides to transfer $1 million out of its account at Chase Manhattan Bank in New York and deposit the funds with Barclays Bank in London, to take advantage of the higher interest rate offered on Eurodollar accounts.
rates are the rates paid on large deposits of dollars in foreign banks.
The Treasury-to-eurodollar (TED) spread compares the yield on three-month T-bills with three-month eurodollar deposit
Treasury bills, the biggest investment after money funds, hold just 5% of short-term funds, while 4% is in commercial paper and 3% each in Eurodollar deposits
and separately managed accounts (SMAs).
Examining current rates, all but those for Eurodollar deposits
are now below 15 basis points.