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- The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest12. It is a requirement determined by the country's central bank, which in the United States is the Federal Reserve1. The reserve ratio is expressed as a percentage of the bank's total deposits2. It exists to ensure that the bank is able to pay an unusually high number of withdrawals on demand accounts should that event occur2.Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest. This is a requirement determined by the country's central bank, which in the United States is the Federal Reserve. It is also known as the cash reserve ratio.www.investopedia.com/terms/r/reserveratio.aspThe liquid assets that a central bank or other body mandates that a bank keep at all times. The reserve ratio is expressed as a percentage of the bank's total deposits. The reserve ratio exists to ensure that the bank is able to pay an unusually high number of withdrawals on demand accounts should that event occur.financial-dictionary.thefreedictionary.com/Required…
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