The reserve requirement ratio (RRR) is the percentage of deposits that banks must hold as reserves rather than lend out.
When a central bank lowers this ratio, commercial banks can lend out more of their deposits to clients, increasing the supply of money and stimulating economic activity.
4
14 reads
CURATED FROM
IDEAS CURATED BY
Aloha with my heart! 🤍 I'm Gabriel, entrepreneur from Bangkok, Thailand. 📝 My stash isn't only a point of view. But what I've learn in everyday life. Kindly following me, if my stash ignites some value for you. 👍🏻 Let's greet and share!
Summary from my email subscription "StashAway Weekly Buzz" and this week is about "US-China just went from trade war to trade truce".
“
Similar ideas to What's the reserve requirement ratio?
Banks loan money they don't have. Most hold a limited reserve to serve the few who decide to make redraws. When the majority decides to liquidate their bank accounts we have what is called a bank run.
In order to protect the banks, central banks were created to provide a gu...
The financial system in use today is a version of John Law’s system:
Each country in the developed world has a central bank that issues paper money, manages the supply of credit in the interest of commerce, uses fractional-reserve banking, and has joint-stock companies that pay dividends.
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates