The Eurocurrency market handles a tremendous volume of funds.
Because of the importance of interbank transactions, the gross measure
overstates the actual amount of activity regarding total intermediation of
funds between nonbank savers and nonbank borrowers, as Figure 5.2
shows. To measure the amount of credit actually extended through the
Eurobanks, we use the net size of the market—subtracting interbank
activity from total deposits or total loans existing. To understand the difference between the gross and net volume of Eurodollar activity, consider
the following example.