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This rate is commonly referred to as the cash reserve ratio or shortened as reserve ... China's Reserve Requirement Ratio for large banks ... Ghana: 9.00: Hong Kong ...
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.
Bank reserves are a commercial bank's cash holdings physically held by the bank, [1] and deposits held in the bank's account with the central bank.Under the fractional-reserve banking system used in most countries, central banks may set minimum reserve requirements that mandate commercial banks under their purview to hold cash or deposits at the central bank equivalent to at least a prescribed ...
The capital requirement ratio is perhaps the most important of these other required ratios. When there are no mandatory reserve requirements, which are considered by some economists to restrict lending, the capital requirement ratio acts to prevent an infinite amount of bank lending. [citation needed]
In some simplified expositions, the monetary multiplier is presented as simply the reciprocal of the reserve ratio, if any, required by the central bank. More generally, the multiplier will depend on the preferences of households , the legal regulation and the business policies of commercial banks - factors which the central bank can influence ...
The requirements for the issue of a bank license vary between jurisdictions but typically include: Minimum capital; Minimum capital ratio 'Fit and Proper' requirements for the bank's controllers, owners, directors, or senior officers; Approval of the bank's business plan as being sufficiently prudent and plausible.
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. The ...
In the EU, the minimum bank leverage ratio is the same 3% as required by Basel III. [18] The UK requires a minimum leverage ratio, for banks with deposits greater than £50 billion, of 3.25%. This higher minimum reflects the PRA's differing treatment of the leverage ratio, which excludes central bank reserves in 'Total exposure' of the calculation.