Reserve ratios

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Reserve ratios

Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a noninterest-bearing account at one of the twelve Federal Reserve Banks.

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.
References in periodicals archive ?
YENy DELHy (CyHAN)- India's central bank, the Reserve Bank of India (RBI), decided on Tuesday to keep its key policy rates and the reserve ratios unchanged, RBI Governor Raghuram Rajan said.
India's central bank on Tuesday kept its key policy rates and the reserve ratios unchanged in line with the predictions, while awaiting more robust data on inflation and action from commercial banks to soften their cost of credit to alter its stance.
Global Banking News-February 5, 2015--China reduces reserve ratios
The BSP s nods came on April on the merger of the statutory/legal and liquidity reserve requirement and cut the reserve ratios from 21% to 18%.
ANKARA, Aug 5, 2011 (TUR) -- Turkey's Central Bank has reduced the required reserve ratios for foreign-exchange deposits by 0.
The central bank cut interest rates to make yields less attractive to hot money inflows and raised required reserve ratios to drain excess liquidity and curb credit growth.
Interestingly, those states that issued bonds in previous recessions did not have lower reserve ratios going into the 2001 recession.
Regulation D (RegD) reserve on Eurodollar (E$) deposits in New York acts as a tariff on "imported" dollars, even though the reserve ratios are the same on both the E$ deposits and domestic deposits of the same maturity.
Canada, France, Germany, Italy, Japan, United Kingdom, and United States) have reduced their reserve ratios as well as simplifying reserve ratio trenches over the past decade in an attempt to lighten the burden they placed on banks.
The Financial Reconstruction Commission, a government panel charged with rebuilding the ailing banking system, plans to map out criteria on how to set aside loan-loss reserves, but the two banks decided on their reserve ratios regardless of how such criteria will be, the sources said.
He said with export growth expecting to further drop in the third quarter, there was a need to cut the reserve ratios to make funds more easily available for local firms.
Reduce the required reserve ratios for all Federal Deposit Insurance Corporation ("FDIC") deposit insurance funds from 1.

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