Reserve requirements

The percentage of different types of deposits that member banks are required to hold on deposit at the Fed. The New York Times Financial Glossary

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   Percentage of deposits that, by law, depository institutions must set aside in their vaults or with their central bank. Lowering or raising this requirement influences the money supply. A reduction in reserve requirements enables banks to increase lending while an increase forces them to reduce lending. Sometimes known as minimum reserve requirements, registered reserves or reserve ratio.

Financial and business terms. 2012.

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