Reserve requirements: Difference between revisions
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imported>Doug Williamson m (Spacing 20/8/13) |
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''Banking''. | ''Banking''. | ||
The minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold. An increase in reserve requirements will lower the supply of money in the economy as banks undertake less lending. | |||
The minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold. | |||
An increase in reserve requirements will lower the supply of money in the economy as banks undertake less lending. | |||
== See also == | == See also == | ||
* [[Monetary policy]] | * [[Monetary policy]] | ||
Revision as of 14:36, 20 August 2013
Banking.
The minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold.
An increase in reserve requirements will lower the supply of money in the economy as banks undertake less lending.
