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. Forex Education

    Forex Currencies: Emerging Market Currencies

    By Brian PerryWhile the majority of trading takes place among the currencies of the largest industrialized economies, emerging market economies and their currencies are playing an increasingly ...
  2. Professionals

    FOREIGN CURRENCY OPTIONS

    The value of one country’s currency relative to another’s is constantly changing and is known as the exchange rate. Large commercial banks exchange currencies for their own accounts ...
  3. Term

    Why Countries Keep Reserve Currency

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

    Exchange-Rate Risk

    CFA Level 1 - Exchange-Rate Risk. A brief look at how exchange-rate risk can affect investments. Provides an example on the downsides of exchange-rate risk.
  5. Investing

    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 ...
  6. Professionals

    International Economic Factors

    FINRA Series 6 Exam Study Guide - International Economic Factors. This section discusses international factors such as currency exchange rates, balance of trade (BOT) and Balance of Payments.
  7. Forex Education

    Forex Currencies: Conclusion

    By Brian Perry Conclusion The currency markets are the largest and most actively traded financial markets in the world with daily trading volume of more than $3 trillion (Triennial Central ...
  8. Investing Basics

    Broadening Your Portfolio's Borders

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

    International Investing

    NASAA Series 65: Section 10 International Investing. In this section international investing is discussed with a focus on risks and opportunities including ADRs.
  10. Economics

    Ever Wanted to Own International Stocks? Here's How

    Tips and strategies for users to trade in different exchanges around the world.
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. 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 >>
  4. 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 >>
  5. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency ... Read Answer >>
  6. What are the advantages of foreign portfolio investment?

    Learn the advantages that businesses can derive from foreign portfolio investment in an increasingly globalized business ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center