Borrowed reserves

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Borrowed reserves

Funds borrowed from a Federal Reserve Bank by member banks to maintain the required reserve ratios.

Borrowed Reserves

Money that a member bank of the Federal Reserve System borrows from its Federal Reserve bank in order to maintain its required reserves. The interest rate on borrowed reserves is an important benchmark interest rate.
References in periodicals archive ?
Conversely, when expansionary open market purchases spurred banks to repay their indebtedness, the resulting reduction in borrowing (below the Fed's $500-$600 million borrowed reserve target) would indicate the extent of the ease.
Conceptually, tr demand is assumed to depend negatively on ffr, while borrowed reserve demand is assumed to depend positively on ffr.
In the day-to-day conduct of open market operations, this change was manifested in a shift of focus from a nonborrowed reserve target to a borrowed reserve target.
The approach in the United States shifted in 1982, when the Federal Reserve moved to a borrowed reserve target from a policy of targeting the growth of nonborrowed reserves in response to the high variability of the Federal funds rate over the preceding years.
Borrowed reserve costs are given by an upward sloping schedule, which sums a constant pecuniary cost (the discount rate) with an increasing nonpecuniary hassle cost.
The Federal Reserve's Operating Procedures, Nonborrowed Reserves, Borrowed Reserves and the Liquidity Effect.
The Central Bank does not have a separate item 'bank reserves' but an account which describes overall deposits without reference to beneficiaries and no distinction between reserves and borrowed reserves.
This would have led to an increase in the proportion of owned reserves, which would have reduced the country's vulnerability to abrupt changes in the availability of borrowed reserves.
Acting City Administrator Jamon Kent last week had urged the council to cut spending by $400,000 between now and June 30 in an attempt to repay borrowed reserves and close a spending gap estimated at nearly $800,000.
More to the point, 30 or more years' experience of a federal funds rate above the discount rate has shown no tendency for borrowed reserves to replace nonborrowed reserves because the Reserve Banks guarded against arbitrage.
Also, with at least a six-quarter lag, an inverse relation probably exists between production starts and borrowed reserves (credit availability).
If the Federal Reserve uses a nonborrowed reserves target, as is usually assumed for the October 1979 to October 1982 period, or a borrowed reserves target, as was used after October 1982, then poor predictions of bank borrowing are a potentially significant source of errors in controlling money.