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You are here: Home / Potpourri / Economics 101: Bank Reserve Ratio

Economics 101: Bank Reserve Ratio

Economics 101: Bank Reserve Ratio

[This is part of the series: The Complete Guide To Economics 101.]

What is a bank reserve ratio?

A Bank Reserve Ratio is the fraction of total deposits that a bank holds in reserve.

Take, or instance, a bank with $50 million in deposits.

And bank reserves of 5 million.

This bank’s reserve ratio is 5/50.

5/50= 1/10 = 10%.

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Filed Under: PotpourriTagged With: #Economics101

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