Why must Euro banks operate with narrower spreads than domestic banks? What would happen if the spreads were equal in both markets? The Eurocurrency market improves efficiency of international...

Why must Euro banks operate with narrower spreads than domestic banks? What would happen if the spreads were equal in both markets?

The Eurocurrency market improves efficiency of international finances. Efficiency comes from access to low-cost borrowing, lack of government regulations, and strong competition among the Euro banks.