required reserves

Required reserves

The dollar amounts, based on reserve ratios, that banks are required to keep on deposit at a Federal Reserve Bank.

Reserve Ratios

The liquid assets that a central bank or other body mandates that a bank keep at all times. The reserve ratio is expressed as a percentage of the bank's total deposits. The reserve ratio exists to ensure that the bank is able to pay an unusually high number of withdrawals on demand accounts should that event occur. It also helps ensure that the bank does not over-leverage itself. In some countries, increasing or decreasing reserve ratios may be used to help control the money supply. See also: Basel II, Monetary Policy.

required reserves

The reserves against deposits that commercial banks and thrifts are required to hold either in cash or in deposits at the Federal Reserve. Compare excess reserves. See also reserve requirement.
References in periodicals archive ?
In addition to payments on required reserves, the act also allowed interest to be paid on so-called "excess reserves"--those reserve balances in excess of the required amount but held on deposit with the Fed.
9 billion while the required reserves stood at JD1.
According to banking analysts, increase in the required reserves is caused by an increase in deposits at Jordanian banks.
The metal was little moved by news China's central bank would raise lenders' required reserves by 50 basis points.
764 billion including overnight window deposits held at the bank, while the volume of required reserves was JD1.
China cut its benchmark interest rates and required reserves.
Although they account for only this small portion of current account balances' massive increase, required reserves nonetheless grew 4.
By law, the ratio of required reserves on transaction deposits above a certain level must be set between 8 percent and 14 percent.
1] This reclassification reduces the bank's statutory required reserves while leaving unchanged its customers' perceived holdings of transaction deposits.
The rating is based on the quality of the receivables purchased by CRC, the required reserves dedicated to each receivable pool, 10% of commercial paper outstanding as credit support (minimum $150 million), and 100% liquidity support provided by Citibank.
755 billion on Thursday while the volume of required reserves rose to JD1.
The Federal Reserve currently requires that depository institutions maintain required reserves equal to 10 percent of their transactions deposits above certain minimum levels.

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