ABSTRACT
Currencies have leaped beyond their traditional boundaries, so that today it is possible to write checks in US dollars against bank accounts in Tokyo, or to write checks in Japanese yen against bank accounts in New York. Indeed, bank accounts in different currencies exist side by side in just about every financial center, so that in, for example, London, we find bank accounts in dollars, yen, euros, Swiss francs, and every other major currency. Similarly, it has become possible to arrange loans in US dollars in Hong Kong or in euros in Sydney. The growth rate of these socalled “offshore currency” deposits and loans has been nothing short of startling, and is part of the increased globalization of financial markets in general and of the banking industry in particular.
