Excess reserve

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Under excess reserve is the amount by which the central bank balance of a commercial bank their devoted themselves from the reserve requirement reserve exceeds (reserve command). The sum of the excess reserve plus the minimum reserve results in the reserve actual of the respective commercial bank.

The excess reserves held by commercial banks used to be very small. They rose sharply from autumn 2008.

In banking, secondary liquidity refers to the asset items on the bank balance sheet, which can be exchanged or pledged for primary liquidity (central bank money ) at any time at the respective central bank . These positions in the respective bank balance sheet are then considered eligible for refinancing . The respective central bank is responsible for setting the criteria for the refinancing eligibility of (different) money market papers and represents an expansive / contractive instrument within monetary, discount and open market policy.

The sum of excess reserve and secondary liquidity forms the free liquidity reserve (Lf) of the respective commercial bank and, according to Claus Köhler, this represents the maximum leeway for creating credit for an individual bank (provided that the capital requirements according to currently Basel II / III are met for credit institutions in continental Europe ). The degree of liquidity of a commercial bank, i.e. the amount of the free liquid reserve in relation to its liabilities (deposits), is expressed by the liquidity ratio .

Extended liquidity balance within the liquidity balance concept

Liquidity balance according to Claus Köhler

In contrast to the monetarist money supply control theory (such as the concept of multiple money creation ), the liquidity balance concept according to Claus Köhler (based on the findings of the Radcliffe Report 1959 ) extends the liquidity balance to include the secondary liquidity of the respective credit institution, i.e. additional potential central bank money that the respective institution ( within the framework of the monetary policy of the central bank, which is either restrictive or expansionary) by surrendering its own liquid assets (sale of money market papers, utilization of the open refinancing quota, exchange of foreign money market investments).

See also

Individual evidence

  1. ↑ Wirtschaftslexikon Gabler: Definition of excess reserve
  2. ↑ Alois Oberhauser: The control of bank liquidity as a monetary policy task. In: Problems of the money supply control. Berlin 1978, p. 130. (online)
  3. ↑ Dietrich Dickertmann: The financing of contingent budgets through central bank credit. Berlin 1972, p. 142. (online)
  4. ^ Claus Köhler: Money economy. Volume 1. Money Supply and Credit Policy. Berlin 1977, p. 98. (online)
  5. ^ Claus Köhler: Money economy. Volume 1. Money Supply and Credit Policy. Berlin 1977, p. 125. (online)
  6. ^ Rüdiger Pohl: Monetary base versus liquidity balance. In: Monetary Policy Controversy. Cologne 1973, p. 94 ff.
  7. ↑ Wolfgang Filc, Lothar Hübl, Rüdiger Pohl (eds.): Challenges of economic policy. Festschrift for Claus Köhler. Berlin 1988, p. 9. (online)
  8. ↑ Manfred Borchert: Money and Credit. Introduction to monetary theory and policy. Munich 2003, p. 89. (online)
  9. ^ "Radcliffe Report 1959": Report of the Committee on the Working of the Monetary System , Paper No. 827. London 1959.
  10. ^ Rüdiger Pohl: Monetary base versus liquidity balance. In: Monetary Policy Controversy. Cologne 1973, p. 103.