Bank Reserves

Bank reserves are banks' holdings of deposits in accounts with their central bank (for instance the European Central Bank or the Federal Reserve, in the latter case including federal funds), plus currency that is physically held in the bank's vault (vault cash). The central banks of some nations set minimum reserve requirements. Even when no requirements are set, banks commonly wish to hold some reserves, called desired reserves, against unexpected events such as unusually large net withdrawals by customers or even bank runs.

The Bank of England uses the term rest to describe the same concept.

Read more about Bank Reserves:  Terms

Other articles related to "reserve, bank, bank reserves, reserves, banks":

How Open Market Operations Are Conducted - United States
... Monetary policy of the United States In the United States, as of 2006, the Federal Reserve sets an interest rate target for the Federal funds (overnight ... funds rate is higher than the target, the New York Reserve Bank will usually increase the money supply via a repo (effectively borrowing from the dealers' perspective lending for the Reserve ... When the actual Federal funds rate is less than the target, the Bank will usually decrease the money supply via a reverse repo (effectively lending from the dealers' perspective borrowing for the Reserve Bank) ...
Bank Reserves - Terms
... Reserves on deposit – deposit accounts at the central bank, owned by banks ... Vault cash – reserves held as cash in bank vaults rather than being on deposit at the central bank ... Borrowed reservesbank reserves that were obtained by borrowing from the central bank ...
Federal Takeover Of Fannie Mae And Freddie Mac - Market Consequences - Bank Reserves
... Many commercial banks in the United States own Freddie and Fannie preferred shares ... Banks were required to write down the value of Freddie and Fannie preferred stock held in their portfolios, compounding capitalization concerns for certain U.S ... banks ...
Money Supply - Bank Reserves At Central Bank
... When a central bank is "easing", it triggers an increase in money supply by purchasing government securities on the open market thus increasing available funds for private banks to loan through fractional-reser ... With "easy money," the central bank creates new bank reserves (in the US known as "federal funds"), which allow the banks lend more ... These loans get spent, and the proceeds get deposited at other banks ...

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