A shift in London s eurodollar market

London's interbank market went through a sectoral shift in recent years. The rate at which banks channel funds back into the interbank market declined sharply following the introduction of the euro and the subsequent contraction in foreign exchange trading. Surplus dollars from the banking sector have been used to finance non-bank borrowers, primarily in the United States, and may reflect the greater role of the London market in financing securities trading in New York.

JEL classification: G150