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Excess reserves

Index Excess reserves

In banking, excess reserves are bank reserves in excess of a reserve requirement set by a central bank. [1]

22 relations: Austerity, Bank reserves, Central bank, Emergency Economic Stabilization Act of 2008, Federal funds, Federal Reserve System, Fractional-reserve banking, Interest, Monetary policy, Money multiplier, Money supply, Negative interest on excess reserves, Nominal income target, Overnight rate, Paradox of thrift, Paul Sheard, Pushing on a string, Quantitative easing, Quantitative tightening, Reserve requirement, Securitization, Zero interest-rate policy.

Austerity

Austerity is a political-economic term referring to policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both.

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Bank reserves

Bank reserves are a commercial banks' holdings of deposits in accounts with a central bank (for instance the European Central Bank or the applicable branch bank of the Federal Reserve System, in the latter case including federal funds), plus currency that is physically held in the bank's vault ("vault cash").

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Central bank

A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates.

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Emergency Economic Stabilization Act of 2008

The Emergency Economic Stabilization Act of 2008 (Division A of), commonly referred to as a bailout of the U.S. financial system, is a law enacted subsequently to the subprime mortgage crisis authorizing the United States Secretary of the Treasury to spend up to $700 billion to purchase distressed assets, especially mortgage-backed securities, and supply cash directly to banks.

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Federal funds

In the United States, federal funds are overnight borrowings between banks and other entities to maintain their bank reserves at the Federal Reserve.

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Federal Reserve System

The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States of America.

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Fractional-reserve banking

Fractional-reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, but is required to hold reserves equal to only a fraction of its deposit liabilities.

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Interest

Interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (i.e., the amount borrowed), at a particular rate.

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Monetary policy

Monetary policy is the process by which the monetary authority of a country, typically the central bank or currency board, controls either the cost of very short-term borrowing or the monetary base, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

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Money multiplier

In monetary economics, a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system.

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Money supply

In economics, the money supply (or money stock) is the total value of monetary assets available in an economy at a specific time.

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Negative interest on excess reserves

Negative interest on excess reserves is an instrument of unconventional monetary policy applied by central banks to encourage lending by making it costly for commercial banks to hold their excess reserves at central banks so they will lend more readily to the private sector.

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Nominal income target

A nominal income target is a monetary policy target.

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Overnight rate

The overnight rate is generally the interest rate that large banks use to borrow and lend from one another in the overnight market.

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Paradox of thrift

The paradox of thrift (or paradox of saving) is a paradox of economics.

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Paul Sheard

Paul James Sheard (born November 25, 1954) is a US-based Australian economist.

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Pushing on a string

Pushing on a string is a figure of speech for influence that is more effective in moving things in one direction than another – you can pull, but not push. If something is connected to someone by a string, they can move it toward themselves by pulling on the string, but they cannot move it away from themselves by pushing on the string.

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Quantitative easing

Quantitative easing (QE), also known as large-scale asset purchases, is an expansionary monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to stimulate the economy and increase liquidity.

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Quantitative tightening

Quantitative tightening (QT) is a contractionary monetary policy applied by a central bank to decrease amount of liquidity within the economy.

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Reserve requirement

The reserve requirement (or cash reserve ratio) is a central bank regulation employed by most, but not all, of the world's central banks, that sets the minimum amount of reserves that must be held by a commercial bank.

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Securitization

Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs).

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Zero interest-rate policy

Zero interest-rate policy (ZIRP) is a macroeconomic concept describing conditions with a very low nominal interest rate, such as those in contemporary Japan and December 2008 through December 2015 in the United States.

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Redirects here:

Excess reserve, IOER, Interest on excess reserves.

References

[1] https://en.wikipedia.org/wiki/Excess_reserves

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