Quo Vadis, Eurodollar System? - Jeffrey P. Snider, Emil Kalinowski, Velina Tchakarova

Eurodollars are time deposits denominated in U.S. dollars at banks  outside the United States, and thus are not under the jurisdiction of  the Federal Reserve. Consequently, such deposits are subject to much  less regulation than similar deposits within the U.S. The term was  originally coined for U.S. dollars in European banks, but it expanded  over the years to its present definition. A U.S. dollar-denominated  deposit in Tokyo or Beijing would be likewise deemed a Eurodollar  deposit (sometimes an Asiadollar). There is no connection with the euro  currency or the eurozone. The offshore locations of Eurodollar make it  exposed to potential country risk and economic risk.  Since the Eurodollar market is not run by any government agency its  growth is hard to estimate. However, the Eurodollar market is by a wide  margin the largest source of global finance. In 1997, nearly 90% of all  international loans were made this way. In December 1985 the Eurodollar  market was estimated by J.P. Morgan Guaranty bank to have a net size of  1.668 trillion.  As Chief Investment Strategist for Alhambra Investment Partners, Jeff  directs the day-to-day investment processes and spearheads the  investment research efforts while providing close contact to Alhambra’s  client base.  Emil Kalinowski, CFA, is employed in the metals and mining industry  writing about how socioeconomic and geopolitical trends affect the  supply, demand, and price of base and precious metals. His present focus  is on the 2007 malfunction of the monetary system and its continuing  disorder