Although the origin and early development of the Eurodollar market is attributed, in part, to a desire by holders of dollars to avoid U.S. regulations, including the Regulation Q interest rate ceilings, that market subsequently became a useful source of short-term financing - complementary to the commercial paper market - for large corporations seeking alternatives to more costly domestic commercial bank loans.36 Second, the 1950s and 1960s were characterized by a sharp rise in the importance of large institutional investors especially pension funds - in the stock and bond markets.
This rise, coupled with the growth of mutual  31  U.S. Census Bureau (1997), Series X581. 32  U.S. Census Bureau (1997), Series X531. 33  Hawkins (1963). 34  Miranti (2001). 35  Board of Governors of the Federal Reserve System, Flow of Funds Accounts. 36  See Johnston (1982) and Kindleberger (1993).