The importance of required reserves for banks liquidity maintenanc

Stevanović, Slavica and Belopavlović, Grozdana (2008) The importance of required reserves for banks liquidity maintenanc. In: Challenges of economic sciences in the 21st Century. Institute of Economic Sciences, Belgrade, pp. 684-688. ISBN 978-86-80315-79-9

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Abstract

The basic principles of banking performance are principle of safety, of liquidity and of profitability. The application of these principles is obligatory for the banks in relation to their influence for stable and efficient banking performance. The primary and secondary banks’ reserves serve for liquidity maintenance, as one of the conditions for successful bank performing. One of the main indicators of banks liquidity are compulsory reserves deposited at central bank. The reserve requirement rate are differential and determined by central bank in dependence of the bases on which they are calculated. The required reserve on banks deposit potential represents the important foothold of monetary politics with remarkable influence on financial flows through banks.

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