Funadvice Logo
+ List
More Finance, Jobs & Money Questions

What would a bank do to meet its required reserves ratio?

Would it increase deposits? To me deposits cannot be increased unless someone makes on so i’m not sure. Any help please?

Become an Expert →
Answer #1

encourage people to open new checking/savings accounts, tighter requirements on new loans, or sell some of their mortgages to other institutions.

Recently bank of america sold a crap load of mortgages to Green Tree financing to be able to meet its reserve ratio. I believe it was due to the thousands of people who closed their accounts with them this past year.

Answer #2

following actions not help the bank increase its reserves? A. Borrow reserves in the federal funds market

B. Make additional loans

C. Sell securities

D. Borrow reserves from a Federal Reserve bank

so by eliminating these reasons or factors, bank can meet its requires reserve ratio :)

Answer #3

If a bank is short money at the end of the day, i.e. do not meet their ratios, a lot of banks borrow money from other banks for just that purpose

More Like This
Ask an advisor one-on-one!
Advisor

Middlefield Bank

Banking, Financial Services, Investments

Advisor

The Kingdom Bank

Digital Banking, International Financial Services, Financial Management

Advisor

Capitec Bank

Banking, Finance, Scholarships

Advisor

Bank Reconciliation Software

Bill Management System, Bill Management Software

Advisor

Troy Banks

Utility Audits, Telecom Audits