From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson |
imported>Doug Williamson |
Line 1: |
Line 1: |
| ''Banking''.
| | Standard Setting Body. |
| | |
| The minimum ratio of vault cash and balances ('[[reserves]]') with the [[central bank]] to deposits taken by the bank that the central bank requires commercial banks to hold.
| |
| | |
| An increase in minimum reserve requirements will be likely to lower the supply of money in the economy as banks undertake less lending, and vice versa.
| |
| | |
| | |
| The greatest possible ratio would be 100%. This is known as '100% reserve banking'.
| |
| | |
| Any smaller ratio is known as 'fractional reserve banking'.
| |
|
| |
|
|
| |
|
| == See also == | | == See also == |
| * [[Monetary policy]] | | * [[Standard Setting Body]] |
| * [[Interest on excess reserves]]
| |
Revision as of 12:18, 22 June 2016
Standard Setting Body.
See also