Eurodollars are deposits denominated in United States dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve.  Consequently, such deposits are subject to much less regulation than similar deposits within the United States, allowing for higher margins.  Eurodollar deposits are US dollar-denominated deposits outside of the U.S, they do not however have to be located in Europe to be called Eurodollar deposits.  And there is no connection with the Euro currency regarding these accounts.  Eurodollar CDs are offered by the foreign branches, often located in London, of U.S. banks.  The term can apply to foreign branches of foreign banks of which many are considered as safe as or safer than some U.S. banks.  Eurodollar deposits may be Eurodollar certificates of deposit or simply Eurodollar time deposits.  A Eurodollar CD is basically the same as a domestic CD, except that it’s the liability of a bank outside of the United States, either a foreign bank or U.S. bank subsidiary of a non-U.S. bank.

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