Thursday, April 30, 2009

forecasting Bank Reserve Requirements

The money desk managers, who manage the cash reserve position in large commercial banks must still keep close track of the factors that determine reserve requirements, mainly a change in both demand and time deposits. Often, for large city banks at least, future required reserve are projected for several weeks ahead with daily or even hourly revisions of the projections. the money desk must also make certain that the bank has an adequate amount of highly liquid assets, such as treasury bills, that can be liquidated, if needed, to add to the supply of loanable funds, or to restore the legal reserve position of the bank.

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