bank reserves

Discipline: Economics

Bank reserves are the legally-required minimum amount of funds a bank has deposited in its account with the central bank plus the physical amount of cash it hasin its vault.

The purpose of the legal deposit requirement is to protect the account holders' funds, since banks can operate only with a very small percentage of the account holders' deposits.

The securities the bank holds are also considered secondary reserves.

Also See:

· bank money
· vault cash

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