Competition and Opportunity: How International Forces Spurred Innovation in U.S. Banking

1. What are eurodollars? What gave rise to the eurodollar market? What advantages did U.S. banks gain by raising funds in the eurodollar market rather than from domestic sources?

2. What financial innovations and regulatory changes were stimulated by eurodollars?

3. What was Regulation Q, why was it adopted, and why was it later eliminated?

4. How did competition from foreign banks in the U.S. promote interstate banking and the removal of Glass-Steagall’s separation of commercial and investment banking?

5. How have international forces impacted the choice of targets for monetary policy?

Source: “Competition and Opportunity: How International Forces Spurred Innovation in U.S. Banking.” Richard N. Cooper and Jane Little, Federal Reserve Bank of Boston Regional Review, 11(3), Q3 2001, pp. 16-23.