Required reserves

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

Required Reserves
Reserves that the central bank requires commercial banks to hold.
Reserve Requirement ...

Required reserves - The reserves that a bank must, by law, keep either in currency or in deposits with the central bank.

REQUIRED RESERVES
The reserves (vault cash and Federal Reserve deposits) that banks are required by government to keep to back up deposits. The primary use of required reserves is to process daily checkable deposit transactions.

Also known as required reserves.
See also: Bank Run, Discount Rate, Federal Funds Rate, Federal Reserve Bank, Federal Reserve Open Market Committee (FOMC), Federal Reserve Board (FRB), Interest Rate, Monetary Policy, Multiplier Effect, ...

Federal funds market The market in which banks can borrow or lend reserves, allowing banks temporarily short of their required reserves to borrow reserves from banks that have excess reserves.

By raising or lowering the amount of required reserves, the Federal Reserve can either stimulate or tighten available bank credit, and the ability of banks to lend-known as fractional reserve banking.

More importantly, the required reserves also enable the Federal Reserve authorities to influence the lending activities of banks.

Then came runs on other companies, a deficit in the required reserves of New York banks of$38,838,8 25ifl the week of 2nd November, and arrangements for the importation of foreign gold to an amount which soon approached $100,000,000.

Another way banks can borrow funds to keep up their required reserves is by taking a loan from the Federal Reserve itself at the discount window.

Actual reserves that exceed required reserves.
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.

Any excess of actual reserves above required reserves.
Excess return on the market portfolio
The difference between the return on the market portfolio and the riskless rate.

Actual reserves that exceed required reserves. Excess return on the market portfolio
Difference between the return on the market portfolio and the riskless rate.
Excess returns ...

The market in which banks can borrow or lend reserves, allowing banks temporarily short of their required reserves to borrow reserves from banks that have excess reserves.
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Personal Finance Glossary ...

In order to meet deposit withdrawal contingencies, many banks maintain a margin of excess reserves above the required reserve ratio, since the required reserves are really not available to meet withdrawal liquidity needs.

Excess reserves
Actual reserves that exceed required reserves.
Excess return on the market portfolio
Difference between the return on the market portfolio and the riskless rate.

Required Reserve Balance Portion of its required reserves that a depository institution must hold in an account at a Federal Reserve Bank.

Any actual reserves above the minimum dollar amount that a commercial or savings bank is required to keep on deposit at a Federal Reserve Bank. The required reserves are based on ratios that reflect the level of a bank's contingent liabilities.

Vault cash Cash kept on hand in a depository institution's vault to meet day-to-day business needs, such as cashing checks for customers; can be counted as a portion of the institution's required reserves.

required reserves The amounts that banks are required to keep on deposit at a Federal Reserve Bank, as determined by reserve ratios. requisition A written request to buy something.

See also: Banks, Excess reserves, Expected return, Expense, Asset pricing model