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- The legal reserve requirement refers to the minimum amount of funds that financial institutions, such as banks, are required by law to hold in reserve against their deposit liabilities12. This concept is crucial for maintaining financial stability and ensuring that banks have enough liquidity to meet customer demands and regulatory standards1.Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Legal reserves are the funds that financial institutions, such as banks, are required by law to hold in reserve against their deposit liabilities. This concept is crucial for maintaining financial stability and ensuring that banks have enough liquidity to meet customer demands and regulatory standards.accountend.com/understanding-legal-reserve-requi…The minimum balance of current account or special reserve account that a financial institution is required to maintain as reserves at the Bank is referred to as the legal reserve requirement (or required reserves).www.boj.or.jp/en/about/education/oshiete/seisaku/…
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