Word: eurodollars
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
MOST of the speculative money that flooded into West Germany last week came from a volatile and increasingly powerful segment of the world's financial apparatus: the Eurodollar market. That market is a curious byproduct of two decades of U.S. balance of payments deficits. Eurodollars are nothing more than U.S. dollars on deposit in private banks abroad. The pool was organized in the late 1950s by London bankers who sensed that if they could marshal the billions of dollars already overseas, they could lend them out at a substantial profit. Business has been brisk ever since...
Today the Eurodollar market has expanded into a wholesale operation on a global scale. It involves roughly 500 banks in 40 countries. The banks accept deposits (minimum: $25,000) and arrange loans (usually from $100,000 up) among one another and with their customers over a telephone and Telex network. Fed most years by continuing U.S. payments deficits, the pool of money has grown geometrically from $8 billion in 1964 to $16 billion in 1967 to $27 billion at the end of April...
...Eurodollars create a mixture of benefits and headaches. On the plus side, they provide a vital source of private capital to finance world trade and the growth of international corporations. They bankroll oil exploration, highway construction and even occasional European government deficits. Without them, Europe would lack the investment capital to sustain its present Dace of economic growth. The Eurodollar pool has also become a leading haven for nervous money. Fearful of devaluation, individual speculators and treasurers of large corporations swap comparatively weak currencies like British pounds or French francs for Eurodollars...
...government controls the supply of Eurodollars; nor is there any regulation of the interest rates on Eurodollar loans or the uses to which they are put. Thus the expatriate dollars are extraordinarily sensitive to the gyrations of monetary supply and demand. They race across national boundaries in response to tiny changes in interest rates, and their existence complicates government efforts to curb currency speculation. It is hardly surprising that European moneymen have come to regard the Eurodollar as a genie that has somehow escaped from its bottle...
...open a representative office in Manhattan. Last year it became the first German bank to join a major multinational banking combine when it helped to found the Societe Financiere Europeenne in Paris. The Dresdner's year-old Luxembourg subsidiary is thriving in the fast-expanding Eurobond and Eurodollar markets. Increasing its stake in Latin America, the bank last year bought an interest in local banks in Brazil, Chile and Colombia...