Which one of the following does NOT cause eurocurrency spreads to be narrower than in domestic money markets?
A)Eurobanks don't have to maintain reserves on Eurodollar deposits
B)Eurobanks face lower regulatory expenses
C)national banks are often required to lend money to certain borrowers at concessionary rates
D)U.S.Federal Reserve bank regulations to cap interest rates charged on loans in the U.S.

Question

Quizplus · Accepted Answer

Eurocurrency spreads are narrower because Eurobanks have fewer regulatory constraints and costs, unlike domestic banks which are subject to regulations such as interest rate caps by the U.S. Federal Reserve.

Which One of the Following Does NOT Cause Eurocurrency Spreads