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Eurodollars are 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., allowing for higher margins. There is nothing "European" about Eurodollar deposits; a U.S. dollar-denominated deposit in Tokyo or Caracas would likewise be deemed a Eurodollar deposit. Neither is there any connection with the euro currency. The term was originally coined for U.S. dollars in European banks, but it expanded over the years to its present definition. More generally, the "euro" prefix can be used to indicate any currency held in a country where it is not the official currency: for example, euroyen or even euroeuro.

(c) The information under this section is originally from Wikipedia and is used under the following licence http://creativecommons.org/licenses/by-sa/3.0/