Reserve requirements

Reserve requirements

The percentage of different types of deposits that member banks are required to hold on deposit at the Fed.

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 ?
The summary of Greenspan's testimony suggests that the Federal Reserve lowered reserve requirements on transaction deposits in 1992 to improve the profitability of depository institutions and thus encourage them to lend more.
Such assets earn no interest when they meet reserve requirements, and traditionally the requirements have led banks to hold greater amounts of these nonearning assets than were optimal for business purposes.
To be useful in policy analysis and empirical studies, aggregate quantity data on bank reserves must be adjusted for the effects of changes in statutory reserve requirements on the quantity of reserves held by banks.
The related issue of what determines short-run fluctuations in reserve requirements has received somewhat more attention.
Taipei -- A decision by the Taiwan central bank to cut commercial banks' reserve requirements could help stimulate the island's rapidly receding economic growth, analysts say.
In section II, I examine the cross-country evidence, asking whether the data suggest that countries with high reserve requirements or high inflation rates grow more slowly than those with low reserve requirements.
The Central Bank on April 15 expanded the range of bank liabilities covered by cash reserve requirements to include commercial paper and all other credit and fund raising instruments.
Indeed, most depository institutions can now meet reserve requirements by holding vault cash rather than by maintaining balances at the Federal Reserve.
Release date- 05082019 - Press Release on Reserve Requirements.
BANKING AND CREDIT NEWS-August 5, 2019--Turkish central bank increases forex deposits' reserve requirements
M2 EQUITYBITES-August 5, 2019--Turkish central bank increases forex deposits' reserve requirements
Global Banking News-August 5, 2019--Turkish central bank increases forex deposits' reserve requirements