Chapter $5$ Revision questions

$1$ Discuss the various methods by which a central bank might sell its Treasury bills to financial institutions and investors.

$2$ Explain what is meant by LIBOR and why it is such a pivotal rate of interest in the financial markets. Discuss the extent to which LIBOR will be affected by changes in dollar Treasury bill interest rates.

$3$ Explain what is meant by the TED spread. What does a rise in the TED spread signify on the interbank market?

$4$ Explain what is meant by a Eurodollar. Discuss the historical development of the Eurodollar market and the extent to which regulation played a role in its development.

$5$ Explain why Eurobanks based in London can offer more competitive deposit and loan rates on dollars than US$-$based banks.

$6$ Discuss the ways in which a Eurobank differs from a normal commercial bank.

$7$ Is Eurobanking activity a threat to the world financial system or does it provide much needed services?