![Economics 101: Bank Reserve Ratio](https://i0.wp.com/sterlingterrell.net/wp-content/uploads/2018/09/1-4.jpg?fit=1024%2C665&ssl=1)
[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%.