A financial innovation that evaded both Regulation Q (interest rate ceilings) and Regulation D (reserve requirements) is which of the following?

Question

Quizplus · Accepted Answer

Eurodollar borrowings are US dollar-denominated deposits held in banks outside the United States. As they are outside the jurisdiction of US banking regulations such as Regulation Q and Regulation D, they were able to evade these restrictions. Large negotiable CDs (B) and repurchase agreements (C) are subject to Regulation D, while money market mutual funds (D) are subject to SEC regulations.

A Financial Innovation That Evaded Both Regulation Q (Interest Rate