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Overseas banks 'double Federal Reserve deposits'

Overseas banks have more than doubled their deposits at the US Federal Reserve throughout this year, new figures have shown.

According to research conducted by inter-dealer broker ICAP, financiers from abroad now hold some $715 billion in the American financial system - significantly more than the $350 billion recorded at the end of last year, Bloomberg reports.

This trend has mainly been attributed to the fact that companies are reluctant to expose themselves to the ongoing financial crisis in the eurozone, meaning the US dollar is now seen even more as the preferred reserve currency across the world.

Jack McIntyre, a fund manager at Brandywine Global Investment Management, told the news source there is not currently "anything close to a substitute" for the greenback in the present climate.

This comes after it was revealed recently that British banks have cut their lending to financiers in the eurozone drastically over recent months.

By Gary Cooper