Supplementary reserve, Managerial Economics

Supplementary Reserve, Requirements/Special Deposit

If the Central Bank feels that there is too much money in circulation, it can in addition require commercial banks to maintain over and above cash or liquid assets some additional reserves in the form of Special Deposits.   The commercial banks are asked to maintain additional deposits in their accounts at the central bank, deposits which cease to count among their reserve assets as cover for their liabilities.

Posted Date: 11/29/2012 4:53:32 AM | Location : United States

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