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  2. What Is the Reserve Ratio? - AOL

    www.aol.com/finance/ratio-043001247.html

    The reserve ratio is a regulation set by central banks that determines the minimum amount of reserves a commercial bank must hold, relative to its deposits. This requirement ensures that banks ...

  3. Reserve requirement - Wikipedia

    en.wikipedia.org/wiki/Reserve_requirement

    In theory, this meant that commercial banks could retain zero reserves. The average cash reserve ratio across the entire United Kingdom banking system, though, was higher during that period, at about 0.15% as of 1999. [8] From 1971 to 1980, the commercial banks all agreed to a reserve ratio of 1.5%. In 1981 this requirement was abolished. [8]

  4. Banking regulation and supervision - Wikipedia

    en.wikipedia.org/wiki/Banking_regulation_and...

    The reserve requirement sets the minimum reserves each bank must hold to demand deposits and banknotes. This type of regulation has lost the role it once had, as the emphasis has moved toward capital adequacy, and in many countries there is no minimum reserve ratio. The purpose of minimum reserve ratios is liquidity rather than safety.

  5. Foreign exchange reserves - Wikipedia

    en.wikipedia.org/wiki/Foreign_exchange_reserves

    The government could improve the equilibrium by imposing subsidies and tariffs, but the hypothesis is that the government is unable to distinguish between good investment opportunities and rent-seeking schemes. Thus, reserves accumulation would correspond to a loan to foreigners to purchase a quantity of tradable goods from the economy.

  6. Provision (accounting) - Wikipedia

    en.wikipedia.org/wiki/Provision_(accounting)

    [citation needed] The term "reserve" can be a confusing accounting term. In accounting, a reserve is always an account with a credit balance in the entity's equity on the balance sheet, while to some non-accountants (e.g., actuaries), it has the connotation of money set aside to meet a future liability (a debit balance).

  7. China cuts banks' reserve ratio for second time in 2023 to ...

    www.aol.com/news/china-cuts-banks-ratio-second...

    The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15.

  8. Excess reserves - Wikipedia

    en.wikipedia.org/wiki/Excess_reserves

    Research by personnel at the Fed has resulted in claims that interest paid on reserves helps to guard against inflationary pressures. [2] Under a traditional operating framework, in which central bank controls interest rates by changing the level of reserves and pays no interest on excess reserves, it would need to remove almost all of these excess reserves to raise market interest rates.

  9. Tier 1 capital ratio - Wikipedia

    en.wikipedia.org/wiki/Tier_1_capital

    The theoretical reason for holding capital is that it should provide protection against unexpected losses. This is not the same as expected losses, which are covered by provisions, reserves and current year profits. In Basel I agreement, Tier 1 capital is a minimum of 4% ownership equity but investors generally require a ratio of 10%. Tier 1 ...