A historical assessment of the rationales and functions of reserve requirements
Laws 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.
|Date of creation:||1983|
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- 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.
- 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.
- 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.
- 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.
- 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.
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