0
Primary Reserves
Primary reserves consist of cash on hand in the bank and deposits owed to it by other banks. These are also called the legal reserves. From this cash on hand tellers are able to meet customer demands for withdrawals, exchanges, and loans. Any excess reserves may be invested in larger banks in the form of the loans; in the United States these are called federal funds.
Total cash required to support the operations of a bank, legal or mandatory reserve requirements, and uncollected checks. Primary reserves cannot be loaned or invested, but may be used in a liquidity crisis caused by sudden and heavy cash withdrawals by bank's depositors.
Secondary Reserves
Assets invested in short-term marketable securities, usually Treasury bills and short-term government securities. legal-reservekept in a Federal Reserve Bank don't earn interest, but secondary reserves are a source of supplemental liquidity. These earn interest and can be used to adjust a bank's reserve position. If loan demand is slow, deposit funds often are invested in short-term securities that are easily converted to cash. Secondary reserves are not listed as a separate balance sheet item.
Securities purchased by a bank for investment purposes are known as secondary reserves. In the United States, much of this investment is in municipals-bonds and notes issued by local or state governments. Banks also buy bills, notes, and bonds issued by the United States Treasury and securities issued by other federal agencies. All such securities are low-risk investments. …
Priti Upadhyay( GZB) ( priti.up@gmail.com)
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Identify the difference between primary sector and secondary?
Identify the difference between primary sector and secondary sector
What is the difference between primary ans secondary industry?
secondary is cooler
What kind of company is a marks and spencers primary secondary or tertiary?
Secondary
Is go bananas primary secondary or tertiary industry?
primary industry
Secondary parts of a business letter?
what are the primary and secondary parts of business letter
The difference between primary and secondary reserves?
what are the diffrence between primary reserve and secondary reserve?
Difference between primary server and secondary server?
Primary Means, it is individual there is no dependence, But Secondary will allays depends on Primary, If you want to do Secondary, you should complete primary first, There is no precondition to primary, but for Secondary Primary is the Precondition, first you should do primary, then only you are able to do secondary.
What is primary and secondary victim?
primary: Raul Secondary: Julie
What is Primary demand and secondary demand?
primary and secondary demand
A transformer has 20 primary windings and 100 secondary windings If the secondary voltage is 25 V find the primary voltage?
Voltage on primary/Primary turns = Voltage on secondary/Secondary turns
What are the two coils in a transformer?
primary and secondary coilsAnswerPrimary and secondary windings.
What are the body's primary and secondary responses?
Primary is IgM and secondary is IgG
How are secondary color related to primary colors?
Secondary colors are colors that are made from primary colors EX: Primary- red, blue =secondary- purple Primary- blue, yellow =secondary - green etc.
Is a predator a primary or a secondary?
secondary
Are furniture primary or secondary?
Secondary
How does the product of voltage and current in the primary compare with the product of voltage and current in the secondary?
The current in the secondary when the voltage is twice the primary will be one half of the primary. The current in the primary when the voltage is twice the secondary will be twice the secondary.
Formula for relation between primary winding and secondary winding?
The turns ratio of Primary / Secondary tells you have the voltage and current will be changed. The secondary current will be (primary turns/secondary turns) times the primary current, and the secondary voltage will be (secondary turns / primary turns) times the primary voltage.CommentThe above answer is a little misleading, because the secondary current is determined by the load, and not by the transformer's ratio. It would, therefore, be more accurate to say that the primary current would be equal to the secondary current times the (primary turns/secondary turns) -i.e. not the other way around!
