Which of the following are the characteristics of the Euro Currency market? a) The euro currency market…
The Eurocurrency market consists of deposits and loans denominated in a currency outside the jurisdiction of its issuing central bank. Because these offshore deposits lie…
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Which of the following are the characteristics of the Euro Currency market?
a) The euro currency market does not have geographical limits
b) The euro currency market is unregulated
c) The euro currency market does not have deposit insurance
d) There are no restriction on the maximum interest payable or chargeable.
e) The euro currency market does not attract CRR and SLR restrictions.
Answer and explanation
Correct answer C
The Eurocurrency market consists of deposits and loans denominated in a currency outside the jurisdiction of its issuing central bank. Because these offshore deposits lie outside domestic central bank jurisdiction, the Eurocurrency market has no geographical limits (a), does not have domestic deposit insurance (c), and is exempt from Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) requirements (e).
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UGC NET Commerce