DEFINITION of 'Shell Branch'

A branch location of a U.S. chartered bank located outside the United States. Shell branches function as booking offices for the bank's financial transactions that happen outside the country. The ledgers of these banks are usually kept at the bank's domestic headquarters or main office. Shell branches are frequently housed inside offshore banking centers.

BREAKING DOWN 'Shell Branch'

Shell branches provide relatively cheap access to the Eurocurrency markets. Many of these branches are located in the Bahamas and Cayman Islands. They are somewhat similar to international banking facilities, which are domestic shell branches of U.S. banks.

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