What Is the Reserve Requirement?
Reserves are cash in the vault or money at the central bank; the share that stays shut is the reserve ratio.
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1.What is a reserve requirement?
Reserves are cash in the vault or money at the central bank; the share that stays shut is the reserve ratio.
2.What is the US reserve requirement since March 2020?
Before 2020, US checking accounts had steps of 0, 3 and 10 percent; the Fed cut them to zero.
3.What is the euro area reserve ratio, and the interest earned on reserves since 2023?
The ratio dropped from 2 to 1 percent in 2012; since 2023 the shut drawer earns 0 percent.
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Sources (7)
- Reserve Requirements (Board of Governors of the Federal Reserve System)
- Federal Reserve Board announces actions to support the economy (Pressemitteilung 15.03.2020) (Board of Governors of the Federal Reserve System)
- Calculation of reserve requirements / minimum reserve ratio (European Central Bank)
- Money creation in the modern economy (Quarterly Bulletin 2014 Q1) (Bank of England (McLeay, Radia, Thomas))
- What are minimum reserve requirements? (Tell me, European Central Bank; veroeffentlicht 11.08.2016, aktualisiert 08.11.2023)
- Changes to the operational framework for implementing monetary policy (ECB-Pressemitteilung 13.03.2024)
- Eigene Rechnung: synthetisches Bankbeispiel (Leo Bankangestellter, Marge Kundin)
Education only. Not financial advice.