Bank Reserve
A Bank Reserve is an asset reserve held by a bank.
- Context:
- It can be defined by a Bank Reserve Requirement.
- …
- Example(s):
- Counter-Example(s):
- See: Foreign-Exchange Reserve, Deposit Account, Central Bank, Federal Funds, Reserve Requirement, Liabilities, Bank Run, Bank-Debt-Backed Fiat Currency.
References
2015
- http://www.investopedia.com/terms/b/bank-reserve.asp
- QUOTE: Bank reserves are the currency deposits that are not lent out to a bank's clients. A small fraction of the total deposits is held internally by the bank in cash vaults or deposited with the central bank. Minimum reserve requirements are established by central banks in order to ensure that the financial institutions will be able to provide clients with cash upon request.
Bank reserves are typically held by financial institutions to avoid bank runs and have sufficient cash on hand, should an unexpected and large withdrawal request come up. Bank reserves are divided into required reserves and excess reserves. Because of the banking industry's importance to the economy, national authorities regulate banks by obligating them to hold a certain amount of required reserves with central banks.
- QUOTE: Bank reserves are the currency deposits that are not lent out to a bank's clients. A small fraction of the total deposits is held internally by the bank in cash vaults or deposited with the central bank. Minimum reserve requirements are established by central banks in order to ensure that the financial institutions will be able to provide clients with cash upon request.
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Bank_reserves Retrieved:2014-12-7.
- Bank reserves or central 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"). [1] The some central banks set minimum reserve requirements, which require banks to hold deposits at the central bank equivalent to a specified percentage of their liabilities such as customer deposits. Even when there are no reserve requirements, banks often opt to hold some reserves — called desired reserves — against unexpected events such as unusually large net withdrawals by customers or bank runs.
In relation to bookkeeping the term is a misnomer. Reserves are ordinarily part of the equity of the company and are therefore liabilities. Bank reserves, on the other hand, are part of the bank's assets. In a bank's annual report, they are referred to as "cash and balances at central banks".
- Bank reserves or central 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"). [1] The some central banks set minimum reserve requirements, which require banks to hold deposits at the central bank equivalent to a specified percentage of their liabilities such as customer deposits. Even when there are no reserve requirements, banks often opt to hold some reserves — called desired reserves — against unexpected events such as unusually large net withdrawals by customers or bank runs.
- ↑ In the case of the Federal Reserve System in the United States, see, e.g., Regulation D, at 12 C.F.R. sec. 204.5(a) and 12 C.F.R. sec. 204.2(k).