Question

Banks offer higher interest rates on eurocurrency deposits than on deposits made in the home currency because eurocurrency deposits ____.select one:a. are funded by the european unionb. lack government regulationsc. are associated with low riskd. have minimum foreign exchange risk

Answer 1

Banks offer higher interest rates on eurocurrency deposits than on deposits made in the home currency because eurocurrency deposits lack government regulations. 

Banks in this situation since they aren't ran by government regulations are able to give interest rates how they feel necessary. They aren't in a typical binding agreement most are that say what they can and can't do, they are ran freely but that also brings on disadvantages as well. One of the main disadvantages is that the bank could fail because they have unregulated funds.