0
deposits and selling of bonds back to the federal reserve.
Wiki User
∙ 10y ago
Wiki User
∙ 13y agoThe purchase of government bonds in the open market by the Federal Reserve Banks
Add your answer:
Earn +20 pts
What increase the commercial bank's reserve?
foreign reserves
Main uses of fund of commercial bank?
capital and reserves
A commercial bank cannot lend out more than?
excess reserves
Open market purchase will result in?
increase in bank reserves and a decrease in the federal funds rate
The main functions of the National Bank of Ethiopia?
To license & supervise banks & hold commercial banks reserves & lend money to them.
What happens when a bank has no reserves?
reserves is the money that a bank holds aside just in case they run out, they'll have money to back them up.When a bank runs out of reserves they can either get loans from the government or file bankruptcy.
Suppose a bank has 500000 in deposits a required reserve ratio of 5 percent and bank reserves of 100000 Then the bank can make new loans in the amount of how much?
required reserves is 25,000. the bank has excess reserves of 75,000, they can loan out everything but the required reserves so assuming they have no loans, they can loan up to 475,000.
Can commercial property financing be obtained online?
Commercial property financing can be obtained online from the following sources: Target Mortgages, Funding Circle, Home Loans, HDFC Bank, Torrey Pines Bank, Bank of America.
Differences between functions of the central bank and commercial bank?
central bank does not accept deposit from customers whiles commercial bank does. central bank is responsible for issuing of currencies whiles commercial bank does not. central bank is accountable to the government whiles commercial bank is accountable to the share holders. central bank is not set up for profit but commercial bank is set up for profit. central bank is governed by an act of parliament whiles commercial bank is set up by an incorporation. central bank formulate monetary policies whiles commercial bank does not.
List and define two types of bank reserves?
Secondary Reserves- Assets that are invested in safe, marketable, short-term securities.Primary Reserves- Cash required to operate a bank.here is a third one...Excess Reserves- Capital reserves held by a bank in excess of what is required.
What banks do when they do not have excess reserves?
reserving bank
Why a central bank may close down a commercial bank?
A central bank may close down a commercial bank if they feel that the bank isn't doing its duties correctly. If it is cheating customers or misusing funds or not following the guidelines laid down by the central bank it can be closed. Usually central banks give warnings to a bank if they find anything and if their warnings are not listened to, they resort to closing the commercial bank down as the last resort.
