Toddsterpatriot
Diamond Member
Reserves are deposit balances with the central bank.
And vault cash.
Vault cash can be used to satisfy a reserve requirement
Yes, because vault cash is part of reserves. LOL!
A reporting institution may satisfy its reserve requirements by holding vault cash, by holding a reserve balance with its Federal Reserve Bank, or by electing to be a respondent and passing its required reserve balance through a correspondent institution.
Page 18
http://www.federalreserve.gov/reportforms/forms/FR_2900cu20120930_i.pdf
Are you done making me laugh yet?
- You are going to continue to be wrong about everything here.
Sometimes it's best to recognize that an argument isn't ideological, and you don't need to argue with it.
Sometimes it's best to recognize that an argument isn't ideological
I never said your errors were ideological.
I'm just showing you're wrong.
- Oh you are, are you?
Your understanding of this seems a little tangled.
So far you've claimed that a bank can turn an asset into a liability, which takes two credit entries - you keep denying that, but can't name any debit entry a bank could possibly make which would fit your little scenario.
You initially claimed that banks loaned deposits, but abandoned that when you were shown conclusively to be wrong.
You then decided that banks lend reserves, but now admit they can't, and are now falling back on two positions:
1) Some sort of mumbling musings that even though banks can't lend reserves, that the fact that reserves exist in the financial universe somehow means banks are lending them and
2) This new, twisted argument in which a federal regulation says that a reserve requirement can be met either with reserves or with something else means that the something else is actually reserves, which can most charitably be described as an abuse of both logic and the English language.
So how are you "proving me wrong", exactly? Is that like claiming that the bruises the other guy gave you prove you won the fight?
So far you've claimed that a bank can turn an asset into a liability,
No I didn't.
You initially claimed that banks loaned deposits, but abandoned that when you were shown conclusively to be wrong.
Banks can loan deposits, less the reserve requirement.
Never abandoned my position.
You then decided that banks lend reserves, but now admit they can't
Banks can lend reserves. Never abandoned my position.
This new, twisted argument in which a federal regulation says that a reserve requirement can be met either with reserves or with something else means that the something else is actually reserves
Code of Federal Regulations
Title 12 - Banks and Banking
Volume: 2Date: 2012-01-01Original Date: 2012-01-01Title: Section 204.5 - Maintenance of required reserves.Context: Title 12 - Banks and Banking. CHAPTER II - FEDERAL RESERVE SYSTEM. SUBCHAPTER A - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. PART 204 - RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS (REGULATION D).
§ 204.5 Maintenance of required reserves. (a)(1) A depository institution, a U.S. branch or agency of a foreign bank, and an Edge or Agreement corporation shall maintain required reserves in the form of vault cash and, if vault cash does not fully satisfy the institution's required reserves, in the form of a balance maintained (i) Directly with the Federal Reserve Bank in the Federal Reserve District in which the institution is located, or (ii) With a pass-through correspondent in accordance with § 204.5(d).
Maintenance of required reserves.
I'm torn. What is more credible, the actual Federal Regulation, or the clown who said.......
But the two kinds of money are not exchanged. Bank deposits never become central bank reserves or vice versa.
LOL!
- Vault cash satisfies the reserve requirement. It is NOT the same thing as balances at the central bank, which ARE reserves. That's what they are called.
§ 204.5 Maintenance of required reserves. (a)(1) A depository institution, a U.S. branch or agency of a foreign bank, and an Edge or Agreement corporation shall maintain required reserves in the form of vault cash