Which measures increased the degree of imperfection in the US domestic money market during the 1960s, which also encouraged the development of the Eurocurrency market?

Question

Quizplus · Accepted Answer

Both Regulation Q, which capped the interest rates that banks could offer, and the 1963 Interest Equalisation Tax, which was designed to discourage foreign investment by Americans by taxing foreign securities, contributed to the imperfections in the US domestic money market. These measures made the Eurocurrency market, particularly the Eurodollar market, more attractive as it offered higher interest rates and was not subject to these regulations.

Which Measures Increased the Degree of Imperfection in the US