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Fractional Reserve
Fractional Reserve

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!!! Overview
[{$pagename}] is the common practice by commercial [banks] of accepting deposits, and making loans or investments, while holding reserves at least equal to a fraction of the [bank]'s deposit liabilities.
Reserves are held as currency in the [bank], or as balances in the bank's accounts at the [Central Banking System] bank. Fractional-reserve banking is the current form of banking practiced in most countries worldwide.
!! Fractional Reserve Requirements
Some [banks] are exempt from holding reserves, but all [banks] are paid a rate of interest on reserves. This rate is called the "interest rate on reserves" or the "interest rate on excess reserves," the IOR and IOER, respectively. This rate acts as an incentive for [banks] to keep excess reserves. Banks with less than $15.2 million in assets are not required to hold reserves. Banks with assets of less than $110.2 million but more than $15.2 million have a 3% reserve requirement, and those banks with over $110.2 million in assets have a 10% reserve requirement.
!! More Information
There might be more information for this subject on one of the following:
[{ReferringPagesPlugin before='*' after='\n' }]
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* [#1] - [Fractional-reserve_banking|Wikipedia:Fractional-reserve_banking|target='_blank'] - based on information obtained 2018-11-29-
This page (revision-1) was last changed on 29-Nov-2024 16:16 by UnknownAuthorTop