legal banking reserve

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Tags: banking

the currency deposits which are not lent out to the bank’s clients. A small fraction of the total deposits is held internally by the bank or deposited with the central bank. Minimum reserve requirements are established by central banks in order to ensure that the financial institutions will be able to provide clients with cash upon request.
(source: http://www.investopedia.com/terms/b/bank-)reserve.asp#ixzz2K3AVALwM

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