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What are the banking system's excess reserves?Excess reserves are capital reserves held by a bank or financial institution in excess of what is required by regulators, creditors, or internal controls. For commercial banks, excess reserves are measured against standard reserve requirement amounts set by central banking authorities.
What is a 100 percent reserve banking system?Full-reserve banking (also known as 100% reserve banking, narrow banking, or sovereign money system) is a system of banking where banks do not lend demand deposits and instead, only lend from time deposits.
When a banks excess reserves are zero?When a bank's excess reserves equal zero, it is loaned up. Finally, we shall ignore assets other than reserves and loans and deposits other than checkable deposits. To simplify the analysis further, we shall suppose that banks have no net worth; their assets are equal to their liabilities.
What are reserves in the banking system quizlet?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.
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