An advantage to American banks from operating foreign branches is that Eurodollar deposits in offshore branches are
A)not subject to reserve requirements.
B)insured by the FDIC.
C)subject to extensive regulatory supervision.
D)all demand deposits that pay no interest.

Question

Quizplus · Accepted Answer

Eurodollar deposits in offshore branches are not subject to reserve requirements. This means that American banks can hold more deposits without having to allocate funds to meet the reserve requirements set by the Federal Reserve. As a result, the banks can earn more interest income on these deposits.

An Advantage to American Banks from Operating Foreign Branches Is