Bank reserves are classified as either required reserves or excess reserves. Required reserves: As the name implies, required reserves are how much banks are required to keep on hand by government ...
Because banks don't earn any interest on this money, they generally try to maintain the smallest amount of reserves possible. One way they get rid of excess reserves is by lending it to other ...
Then, when the recession came, the Federal Reserve started paying interest on excess reserves at a rate higher than U.S. Treasuries. Suddenly, lending became high-risk and holding onto reserves ...
OTTAWA--The Bank of Canada is formally ending its program to shrink central-bank reserves, and anticipates resuming asset purchases on March 5 as part of normal balance-sheet management.