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.
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.
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.
Conceptually, tr demand is assumed to depend negatively on ffr, while borrowed reserve demand is assumed to depend positively on ffr.
It is widely believed that the Federal Reserve (Fed) continues to employ the borrowed reserve operating procedure originally implemented in October 1982.
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.
While the quantum has increased, the quality of reserves too has improved, as the bulk of the reserve growth has been through earned reserves as opposed to borrowed reserves, reversing previous trends.
In addition, the expected cost of holding reserves tends to be quite modest and relatively stable: the holding costs (or "carry costs") of borrowed reserves is the (typically small) margin between the government's foreign currency borrowing cost relative to the return on foreign currency paper held.
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.