Borrowed reserves

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 ?
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.
With nonborrowed reserves ignored, all reserves were borrowed reserves [R.
CEE argue, using as an example Goodfriend's (1983) model of borrowed reserves, that theory suggests an effect of nbr on borrowed reserves, and they present empirical evidence that nbr affects borrowed reserves contemporaneously.
When the FOMC implemented policy by establishing targets for the level of borrowed reserves, FOMC members and staff estimated the level (or range) of the federal funds rate expected to be consistent with the Committee's borrowed reserves target.
It was understood that operations would continue to be conducted with some flexibility in light of the persisting uncertainty in the relationship between the demand for borrowed reserves and the federal funds rate.
The supply of reserves has two components, borrowed reserves and nonborrowed reserves.
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.
The change in operating procedures in 1982 from a non-borrowed reserves regime to a borrowed reserves regime was expected to lower short-term interest rate volatility, and it did [14].