Besides lower reserve requirements, Eurobanks also benefit from having no govern- ment-mandated interest rate controls, no deposit insurance, no government-mandated credit allocations, no restrictions on entry of new banks (thus encouraging greater competition and efficiency), and low taxes. This does not mean that the countries hosting the Eurobanks do not use such regulations. What we observe in these countries are two sets of banking rules: various regulations and restrictions apply to banking in the domestic currency, whereas offshore banking activities in foreign cur- rencies go largely unregulated.