Bank reserves are banks' holdings of deposits in accounts with their central bank (for instance the European Central Bank or the Federal Reserve, in the latter case including federal funds), plus currency that is physically held in the bank's vault (vault cash). The central banks of some nations set minimum reserve requirements. Even when no requirements are set, banks commonly wish to hold some reserves, called desired reserves, against unexpected events such as unusually large net withdrawals by customers or even bank runs.
The Bank of England uses the term rest to describe the same concept.
Read more about Bank Reserves: Terms
Famous quotes containing the words bank and/or reserves:
“Good resolutions are useless attempts to interfere with scientific laws. Their origin is pure vanity. Their result is absolutely nil. They give us, now and then, some of those luxurious sterile emotions that have a certain charm for the weak.... They are simply cheques that men draw on a bank where they have no account.”
—Oscar Wilde (1854–1900)
“...I want to see a film, they send the Israeli army reserves to escort me! What kind of life is this?”
—Golda Meir (1898–1978)