cash reserve ratio
- noun
- Indian
:
coeficiente de reservas en efectivo
- In contrast, the cash reserve ratio at banks in counties with an additional year of coverage by public insurance of circulating notes, double liability, or branch banking was 0.1, 0.1, and 0.3 percentage points higher, respectively, than at banks in contiguous border counties without.
Examples
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Regulatory authorities often adjust the cash reserve ratio to stabilize the financial system.
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The bank must maintain a cash reserve ratio to ensure it has enough liquidity to meet withdrawal demands.
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Longer-term coverage by double liability was strongly associated with more conservative bank borrowing and lending; not only were banks with double liability less levered, but they also maintained higher cash reserve ratios, relied more on note issuance versus deposits for funding, and had lower relative exposure to real estate.
Academic text (2017) -
An increase in the cash reserve ratio means banks have less money available to lend to customers.
Synonyms
1
7.2
The percentage of a bank's deposits that must be kept so customers can withdraw money
The minimum percent of a bank's deposits it must keep and not lend
Surface Forms
Morphology
The phrase transparently combines 'cash' + 'reserve' + 'ratio' so a learner who knows those words can infer it refers to the proportion of cash held as reserves. However, it is a technical banking/regulatory term specifying the percentage of deposits that must be kept and the precise institutional meaning and obligation (e.g. which base is used) are domain-specific and not fully predictable to a B1 learner, so the transparency is only partial.
Etymology
Cash reserve ratio comes from a simple picture: a bank keeps a safety reserve of cash, and the ratio is the 'part' of deposits that must stay there and not be 'lent out'. That's why the term means the 'percentage of a bank's deposits it must hold and not lend' today.