ABSTRACT
This chapter looks at certain official pronouncements and proposals on the subject of Eurofinance which give an insight into the beliefs and doubts of those who operate, or who might have some responsibility for overseeing, the system as a whole. The imposition of reserve requirements upon Eurobanks might very well raise rates of interest and indeed may have the effect of diminishing the amount of international lending channeled through the Euromarket. The fear that Eurofinance markets obstruct domestic monetary management particularly affects those economies whose currencies are widely held internationally; hence the longstanding concern on this matter of the legislative and administrative branches of government in the USA. Reserve requirements would be set on a basis comparable to those applying to member banks of the Federal Reserve System. The primary purpose of reserve requirements in a national banking system is to ensure that a minimum proportion of assets is deposited with the central bank.
