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Definitions from the WebReserve RequirementsDescription:Reserve requirements refer to the regulations imposed by central banks on financial institutions, mandating the minimum amount of liquid assets they must hold as a percentage of customer deposits. These requirements serve as a tool for controlling inflation, ensuring stability in the banking system, and managing the money supply. Senses:1. Noun (Plural: Reserve Requirements)a) The minimum amount of cash or reserve balance that financial institutions are required to maintain. b) The regulations or rules set by central banks regarding the minimum reserve ratio. c) The portion of deposits that a bank must keep available for withdrawal, rather than lending or investing. Usages:1. Popular Usage:The reserve requirements set by the Federal Reserve Bank ensure that banks are well-capitalized and able to meet the depositors' demands. Sample Sentence:Due to the increased demand for loans, the bank could not maintain the required reserve requirements, leading them to borrow from other financial institutions. 2. Local Usage:In some regions, local regulators may set different reserve requirements tailored to the unique financial needs and conditions of the area. Sample Sentence:The local reserve requirements in this province are more lenient, allowing smaller banks to thrive and support local businesses. Related Products:Here are some related products that you can explore on Amazon: | ||||
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