Description
Why do you think is it important for depository institutions to carefully monitor their position in regards to their reserve requirements? Please discuss and elaborate. Limit to two pages; please feel free to use bullet points to highlight the key points. Please note that this is a written essay assignment that should be well thought after and well articulated.
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Explanation & Answer
Attached. Please let me know if you have any questions or need revisions.
Reserve Requirements - Outline
Thesis Statement: Depository institutions refer to financial institutes that have been allowed by
the government to accept monetary deposits from customers.
I.
This requirements ensure that the banks are able to meet its liabilities in case of
liquidation. The central banks also use this requirements that regulate money supply
in the economy.
II. Monitoring this ratio is essential as it affects the stability of the economy and the
financial security of families.
III. The impact caused by changes in the requirements are not easily measured and have the
potential to ruin many people in different ways such as bank fees and credit fees.
Running head: RESERVE REQUIREMENTS
Reserve Requirements
Name
Institution
1
RESERVE REQUIREMENTS
2
Reserve Requirements
Generally, depository institutions refer to financial institutes that have...