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What does the federal reserve require banks to keep a percentage of their funds as reserves?
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In reference to federal reserve policy what are reserve requirement?
the percentage of a bank's total deposits that must be kept in its possession
In reference to federal reserve policy what are reserve requirements?
the percentage of a bank's total deposits that must be kept in its possession
What increase the commercial bank's reserve?
foreign reserves
What are the percentage of deposits that banks must set aside either in their vaults or in their federal reserve district bank?
Certifcates of deposit
What is the federal reserve most visible role?
what is the federal reserve most visible role
The percentage of deposits that banks must set aside either in their vaults or in their Federal Reserve district bank?
Reserves
What is Reserve requirement ratio?
The Required Reserve Ratio is the percentage/fraction of required reserves that should be held for every dollar of deposits in a depository institution that is required by the Federal Reserve.
Why does the Federal Reserve require commercial banks to have reserves?
To ensure that banks maintain a minimum amount of cash to meet the cash withdrawal requirements of its customers
What happen to cash money?
The money will be absorbed by the Federal Reserve into its cash reserves
Who pays for the army reserves?
The Army Reserve is entirely funded by the federal government.
Who is responsible for monitoring the reserves of state member banks?
The Federal Reserve is responsible.
Are banks permitted to lend all their reserves?
No. They can lend only a % of their total cash reserves. It depends on the Cash Reserve Ratio and Liquidity Ratios set by the Central Banks (Reserve Bank, Federal Reserve etc)
Are the percentage of deposits that banks must set aside either in their vaults or in their federal reserve district bank?
A. reserves B. futures C. caches D. certificates of deposit
Who has the power to change the total amount of reserves in the banking system?
Federal Reserve System
Which of the following will increase commercial bank reserves?
deposits and selling of bonds back to the federal reserve.
Do banks hold ones own account in their vaults?
No. They do not keep customer's money in their vaults. Banks use the money from customers to make loans to other people, corporations, or governments. Bank regulations require banks to keep a certain percentage of total deposits in reserve. Reserves include currency in their vaults, deposits at the central bank (the Federal Reserve in the USA) and certain government bonds. These reserves are not tied to any particular customer's funds.
How could the federal reserve encourage banks to lend out more of their reserves?
By reducing the discount rate
