A historical assessment of the rationales and functions of reserve requirements
AbstractLaws requiring banks to hold a volume of reserves equal to a prescribed fraction of their deposits originated in this country more than a century ago. Since then both the financial system and the rationales supporting reserve requirements have changed considerably. Nevertheless, the practice of requiring reserves has continued without interruption. This article examines the history and function of reserve requirements at the national level and assesses the validity of various prominent reserve requirement rationales.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of Richmond in its series Working Paper with number 83-01.
Date of creation: 1983
Date of revision:
Other versions of this item:
- Marvin Goodfriend & Monica Hargraves, 1983. "A historical assessment of the rationales and functions of reserve requirements," Economic Review, Federal Reserve Bank of Richmond, issue Mar, pages 3-21.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Auernheimer, Leonardo, 1974. "The Honest Government's Guide to the Revenue from the Creation of Money," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 598-606, May/June.
- John Wilson Million, 1894. "The Debate on the National Bank Act of 1863," Journal of Political Economy, University of Chicago Press, vol. 2, pages 251.
- Coats, Warren L, Jr, 1976. "Lagged Reserve Accounting and the Money Supply Mechanism," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(2), pages 167-80, May.
- Sargent, Thomas J & Wallace, Neil, 1982. "The Real-Bills Doctrine versus the Quantity Theory: A Reconsideration," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1212-36, December.
- anonymous, 1938. "The history of reserve requirements for banks in the United States," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Nov, pages 953-972.
- Glocker, Ch. & Towbin P., 2012.
"The Macroeconomic Effects of Reserve Requirements,"
374, Banque de France.
- Ken B. Cyree & Mark D. Griffiths & Drew B. Winters, 2003. "On the pervasive effects of Federal Reserve settlement regulations," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 27-46.
- Bennett T. McCallum, 1994. "Specification and Analysis of a Monetary Policy Rule for Japan," NBER Working Papers 4449, National Bureau of Economic Research, Inc.
- Marvin Goodfriend, 1994.
"Why we need an "accord" for Federal Reserve credit policy: a note,"
Federal Reserve Bank of Cleveland, pages 572-584.
- Marvin Goodfriend, 2001. "Why we need an "accord" for Federal Reserve credit policy : a note," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 23-32.
- Goodfriend, Marvin, 1994. "Why We Need an "Accord" for Federal Reserve Credit Policy: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 572-80, August.
- Robert Darin & Robert L. Hetzel, 1994. "A shift-adjusted M2 indicator for monetary policy," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 25-48.
- Steven Russell & Marco Espinosa, 1990. "The inflationary effects of the use of reserve ratio reductions, or open market purchases, to reduce market interest rates: a theoretical comparison," Working Papers 1990-006, Federal Reserve Bank of St. Louis.
- Tovar, Camilo & Garcia-Escribano, Mercedes & Vera, Mercedes, 2012. "El crecimiento del crédito y la efectividad de los requerimientos de encaje y otros instrumentos macroprudenciales en América Latina," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 24, pages 45-64.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (William Perkins).
If references are entirely missing, you can add them using this form.