Primary and secondary reserves of commercial banks
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The minimum amount of cash required to operate a bank. Primary reserves also include the legal reserves that are housed in a Federal Reserve or other correspondent bank. Checks that have not been collected are included in this amount as well.
Assets that are invested in safe, marketable, short-term securities such as Treasury bills when the demand for loans is low. Secondary reserves provide a supplemental measure of low-risk liquidity. They earn interest and can be useful in adjusting a bank's reserve totals.
Assets that are invested in safe, marketable, short-term securities such as Treasury bills when the demand for loans is low. Secondary reserves provide a supplemental measure of low-risk liquidity. They earn interest and can be useful in adjusting a bank's reserve totals.
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