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In theory, this meant that commercial banks could retain zero reserves. The average cash reserve ratio across the entire United Kingdom banking system, though, was higher during that period, at about 0.15% as of 1999. [10] From 1971 to 1980, the commercial banks all agreed to a reserve ratio of 1.5%. In 1981 this requirement was abolished. [10]
Define the legal reserve ratio, (,), the excess reserves ratio, (,), the currency/deposit ratio with respect to deposits, (,); suppose the demand for funds is unlimited; then the theoretical superior limit for deposits is defined by the following series:
Total capital ratio is ($8,703m + $2,062m)/$107,787m, i.e., 9.99%. It is important how the term "reserves" is defined for calculating the reserve ratio, as different definitions give different results. Other important financial ratios may require analysis of disclosures in other parts of the bank's financial statements.
Bank reserves are a commercial bank's cash holdings physically held by the bank, [1] and deposits held in the bank's account with the central bank.Under the fractional-reserve banking system used in most countries, central banks may set minimum reserve requirements that mandate commercial banks under their purview to hold cash or deposits at the central bank equivalent to at least a prescribed ...
In nonprofit accounting, an "operating reserve" is the unrestricted cash on hand available to sustain an organization, and nonprofit boards usually specify a target of maintaining several months of operating cash or a percentage of their annual income, called an operating reserve ratio.
The reserve portion of the ratio is the amount of a resource known to exist in an area and to be economically recoverable (proven reserves). The production portion (denominator) of the ratio is the amount of resource produced in one year at the current rate. [1] RPR = (amount of known resource) / (amount used per year)
Liquidity ratio may refer to: Reserve requirement , a bank regulation that sets the minimum reserves each bank must hold. Quick ratio (also known as an acid test ) or current ratio , accounting ratios used to determine the liquidity of a business entity
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