RESERVE REQUIREMENTS
- Part of the deposit, which is to preserve financial stability, all banks must keep with the central bank of the country.
Bank in the implementation of its activities aims at maximizing profits, as a result of which he accepts deposits from certain customers and provides loans at interest. But to maintain its financial stability of the bank can not issue credit all amounts received contributions, in this case, he will be on the verge of bankruptcy.
The creators of the first banks, jewelers and money changers, first began to form emergency reserve of gold - currency reserves.
Reserve - an amount of money to meet immediate requirements of investors. With the concept of reserve is closely related to the concept of reserve norms.
reserve norm - the ratio of reserves to total deposits. The higher the reserve ratio, the lower profitability and higher solvency of the bank, and if this rate is lower on the contrary, the profit is high, and the ability to pay will be less.
If not set in legislation reserving rules, each bank decides independently what proportion of the funds received to keep a reserve.
But in most developed countries, this advantage is fixed by law for the central bank of the country.
Allocate the following functions T. F .:
1) maintain the liquidity of banking institutions;
2) a means of regulating the currency;
3) a means of regulating the economy as a whole.
| 
Comments
Commenting, keep in mind that the content and the tone of your messages can hurt the feelings of real people, show respect and tolerance to his interlocutors, even if you do not share their opinion, your behavior in terms of freedom of speech and anonymity offered by the Internet, is changing not only virtual, but real world. All comments are hidden from the index, spam control.