Browse:  #  A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z 

Dictionary

Term of the Day

Reserve requirements

Reserve requirements, a tool of monetary policy, are computed as percentages of deposits that banks must hold as vault cash or on deposit at the central bank (in the United States in a Federal Reserve Bank), rather than, perhaps, lend out. Reserve requirements represent a cost to the banking system. Bank reserves, meanwhile, are used in the day-to-day implementation of monetary policy by the Federal Reserve.

As of 2004, in the United States, the reserve requirement are 10% on "transaction deposits" (component of money supply "M1"), and zero on time deposits and all other deposits.

As "a tool of monetary policy", they are one way of influencing the country's financial behavior, borrowing, and interest rates.




Browse by Subject

Accounting

Insurance

Acronyms

International

Active Trading

IPOs

Banking

Mutual Funds

Bonds

Options & Futures

Brokerage

Real Estate

Buzz Words

Retirement Planning

Earnings

Stocks

Economy

Taxes

Exchanges

Technical Analysis




Ask a Question

Learn the famous formula for money-making, based upon the THIRTEEN PROVEN STEPS TO RICHES! Get your FREE Copy & Instant Access to Think and Grow Rich by Napoleon Hill just by signing up.
 
   
Newsletter cover
Browse:  #  A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z