Euro Feds


DEFINITION of 'Euro Feds'

A federal wire transmission advancing funds in Eurodollars from a U.S. bank with excess funds to another with insufficient reserves. Euro Feds settling in London clear through the clearingshouse interbank payments system (CHIPS) whereas transactions taking place in New York go through the Fedwire.


In some instances it may be more attractive for a U.S. bank to borrow or place funds in the Euro market rather than buying or selling Federal funds. However rates on both Fed funds and overnight Eurodollars are closely related.

  1. Federal Funds Rate

    The interest rate at which a depository institution lends funds ...
  2. Reserve Requirements

    Requirements regarding the amount of funds that banks must hold ...
  3. Eurocurrency

    Currency deposited by national governments or corporations in ...
  4. Fedwire

    A real-time gross settlement system (RTGS) of central bank money ...
  5. Federal Funds

    Excess reserves that commercial banks deposit at regional Federal ...
  6. Euro Deposit

    The equivalent of a money market rate on cash deposits made in ...
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  1. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Full Answer >>
  2. Are eurodollars related to the currency called the euro?

    Eurodollars have little to do with the official currency of the European Union, the euro (EUR). In 1999, the euro was implemented ... Read Full Answer >>
  3. What is the difference between LIBOR, LIBID and LIMEAN?

    LIBOR, LIBID and LIMEAN are all reference rates used to benchmark short-term interest rates. The London Interbank Offered ... Read Full Answer >>

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