Eurocurrency Market


DEFINITION of 'Eurocurrency Market'

The money market in which Eurocurrency, currency held in banks outside of the country where it is legal tender, is borrowed and lent by banks in Europe. The Eurocurrency market is utilized by large firms and extremely wealthy individuals who wish to circumvent regulatory requirements, tax laws and interest rate caps that are often present in domestic banking, particularly in the United States.

BREAKING DOWN 'Eurocurrency Market'

Rates on deposits in the Eurocurrency market are typically higher than in the domestic market, because the depositor is not protected by domestic banking laws and does not have governmental deposit insurance. Rates on loans in the Eurocurrency market are typically lower than those in the domestic market, because banks are not subject to reserve requirements on Eurocurrency and do not have to pay deposit insurance premiums.

  1. Currency

    Currency is a generally accepted form of money, including coins ...
  2. Capital

    1) Financial assets or the financial value of assets, such as ...
  3. Eurocurrency

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

    A bond issued in a currency other than the currency of the country ...
  5. Eurobank

    A financial institution that accepts foreign currency denominated ...
  6. Eurodollar

    U.S.-dollar denominated deposits at foreign banks or foreign ...
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