Question

why keeping excess reserves in banks is considered to be expensive?​

Answer 1

Answer:

because it prints money

Answer 2

The answer is stated below:

Explanation:

• Under the banking, the excess amount of reserves are the bank reserve which is in excess of the requirement of the reserves and it set or assigned by the central bank.
• When the banks kept the excess amount of reserve in banks, is considered as to be expensive as the holding the excess reserve by the banks, create an opportunity cost if the higher risk is adjusted interest could be earned or gained through putting the funds or amount somewhere else.

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