what is outward arbitrage 
outward arbitrage is a type of arbitrage that multinational american based banks engage in taking advantage of differences in interest rates between the united states and other countries although it is almost always large banks that engage in arbitrage smaller non bank depositors and nonbank borrowers also engage in the practice using much less capital outward arbitrage occurs when interest rates are lower in the united states than abroad and banks will borrow in the united states at a low rate and then lend that money abroad at a higher rate pocketing the difference as profit 