Net Free Reserves


DEFINITION of 'Net Free Reserves'

A statistic released in weekly Federal Reserve data showing the amount of money a bank holds above the required minimum. Deposit banks are required to keep a certain amount of cash on hand at all times. If banks have significantly more cash than stipulated by reserve requirements, they will lend it out.

BREAKING DOWN 'Net Free Reserves'

Net free reserves can indicate an easier credit environment and falling interest rates. Conversely, if a bank has insufficient reserves, it will borrow what it needs from the Fed, and the statistic will show net borrowed reserves, which will be expressed as a negative number.

  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Net Borrowed Reserves

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  3. Tight Monetary Policy

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  4. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  5. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  6. Fractional Reserve Banking

    A banking system in which only a fraction of bank deposits are ...
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