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
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