reserve ratio
1
7.2
- noun
- /rɪˈzɜrv ˈreɪʃioʊ/
- Specialized
:
coeficiente de reserva
- Monetarists talk about printing money or lowering the reserve ratios of banks and ways to actually increase the money supply.
- cash reserve ratio
- reserve ratio at banks
- lower reserve ratio
Examples
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Adjusting the reserve ratio can influence the overall money supply in the economy.
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It would throw the bank's reserve ratio out to the degree that payments would not clear.
Blog text (13) -
Second, there is no doubt in my mind that the huge increase in the world's gold reserve ratio after October 1929 was the trigger for the Great Depression.
Blog text (34) -
The most profitable reserve ratio would depend on a trade-off between the opportunity cost of holding reserves and the expected cost of running out of reserves.
Academic text (1991) -
Not only were banks operating under double liability less leveraged, they also maintained higher reserve ratios and were less reliant on deposits.
Academic text (2017) -
Additionally, the banker will probably tell the depositor that the risk is fairly small, as the banker has experience with FRB and can manage to maintain the 'correct' reserve ratio to avoid bank runs.
Blog text (22) -
But a simple textbook derivation of the money multiplier shows that if the reserve requirements for checkable deposits and private currency are equal and binding, the money multiplier is equal to the reciprocal of the required reserve ratio.
Academic text (1991) -
The government requires banks to maintain a certain reserve ratio to ensure they can meet withdrawal demands.
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When the reserve ratio is too low, a bank may struggle to provide cash during a financial crisis.
Synonyms
The percentage of customer deposits a bank must keep and not lend
The minimum percent of a bank's deposits it must keep and not lend
Surface Forms
Morphology
The phrase simply names a numeric relation of reserves: combining 'reserve' (stored quantity kept for purposes) with 'ratio' (a numeric relation) yields the proportion of deposits held as reserves. Although it is a technical banking term, its meaning is compositionally clear and a B1 learner who knows both words can reasonably infer it refers to the proportion of funds kept in reserve.
Etymology
Reserve ratio comes from a simple image: part of a bank's money is kept back as a reserve and the ratio shows that part of the whole. So it means the percentage of deposits a bank must hold and not 'lend out', so customers can 'withdraw' their money.