Eurodollar << YUR oh `dol` uhr >> refers to a transfer of credit designated in U.S. dollars from a U.S. bank to a foreign bank. Banks that handle Eurodollars are sometimes called Eurobanks. Most of them are in Europe, but Eurobanks also operate in international financial centers in Asia and even in New York City.
Eurodollar deposits are subject to few restrictions. For example, banks outside the United States are not required to keep reserves against such deposits. Furthermore, interest rates are unregulated. Critics are concerned that the Eurodollar market limits national control over money and credit. But the Eurodollar system has helped reduce the differences in interest rates between lending and borrowing countries.
