Eurobank

DEFINITION of 'Eurobank'

A financial institution that accepts foreign currency denominated deposits and makes foreign currency loans. As such, a eurobank does not necessarily have to be located on the continent of Europe; it can be anywhere in the world. The emergence of eurobanks has facilitated trade and investment between countries, which was difficult in the past for lack of intermediaries that would accept foreign currencies.

BREAKING DOWN 'Eurobank'

The explosion in international trade since the 1980s has been largely facilitated by the emergence of eurobanks. The emergence of dynamic economies such as China, India and Brazil has contributed to exponential growth in eurobanks. This is because despite the size of these economies and their contribution to growth in international trade, the currencies of some of these nations are still not freely traded on global currency markets, making it necessary to conduct business in foreign currencies.

RELATED TERMS
  1. Outward Arbitrage

    A form of arbitrage involving the rearrangement of a bank's cash ...
  2. Foreign Currency Effects

    The gain or loss on foreign investments due to changes in the ...
  3. Accounting Currency

    The monetary unit used when recording transactions in a company's ...
  4. Transfer Risk

    The risk that a local currency cannot be converted into the currency ...
  5. Translation Risk

    The exchange rate risk associated with companies that deal in ...
  6. Uncovered Interest Arbitrage

    A form of arbitrage that involves switching from a domestic currency ...
Related Articles
  1. Markets

    Why Countries Keep Reserve Currency

    Central banks and financial institutions hold large amounts of foreign money as their reserve currency.
  2. Markets

    Will the Yuan Become an International Reserve Currency?

    Although still a matter of when, China is likely to reach a significant milestone when the International Monetary Fund decides to include the Chinese yuan in its special drawing rights basket ...
  3. Managing Wealth

    Broadening Your Portfolio's Borders

    Find out what type of international fund might suit your needs in gaining exposure to foreign markets.
  4. Investing

    Explaining Foreign Exchange Risk

    Foreign exchange risk is the chance that an investment’s value will decrease due to changes in currency exchange rates.
  5. Markets

    What Happens in a Currency Crisis?

    A currency crisis comes from a decline in the value of a country’s currency.
  6. Trading

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
  7. Trading

    What Causes A Currency Crisis?

    Find out what can cause a currency to collapse, and what central banks can do to help.
  8. Managing Wealth

    How Exchange Risk Affects Foreign Bonds

    Investors include foreign bonds in their portfolios to take advantage of higher interest rates or yields, and to diversify their holdings. However, the higher return expected from investing in ...
  9. Trading

    What is a Direct Quote?

    A direct quote uses variable amounts of the home country’s currency to compare to a fixed amount of a foreign currency.
  10. Trading

    The 3 Biggest Risks Faced By International Investors

    Investing internationally is a great way to diversify your portfolio, but you need to know the risks.
RELATED FAQS
  1. How can I invest in a foreign exchange market?

    The foreign exchange market, also called the currency market or forex (FX), is the world's largest financial market, accounting ... Read Answer >>
  2. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Answer >>
  3. What are some examples of a Foreign Institutional Investor (FII)?

    Discover some examples of foreign institutional investors, and learn information about the nature of foreign institutional ... Read Answer >>
  4. What nations are actively recruiting FDI (foreign direct investments)?

    Understand the concept of foreign direct investments, and learn which countries most enthusiastically pursue investments ... Read Answer >>
  5. 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 Answer >>
  6. How can I trade in foreign futures?

    Discover how an American investor can get started in trading foreign futures, including which regulations and restrictions ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center