Non-Borrowed Reserves

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DEFINITION of 'Non-Borrowed Reserves'

A measure of the reserves in the banking system. Non-borrowed reserves represent the numerical difference between total reserves minus funds that have been borrowed from the Fed discount window.

The first element of this equation consists of the total reserves held at deposit at the Fed by member banks plus the composite cash in their vaults. The second element is money borrowed by banks through the Fed discount window.

BREAKING DOWN 'Non-Borrowed Reserves'

The total amount of non-borrowed reserves is computed each week by the Federal Reserve Bank. The level of reserves is sometimes targeted by adjusting the Fed funds rate to implement monetary policies. Although the arithmetic computation of non-borrowed reserves is quite simple, the underlying factors that sometimes affect this number can be quite complex.

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RELATED FAQS
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    As with most matters related to generally accepted accounting principles (GAAP), accountants assigned with the task of applying ... Read Full Answer >>
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    Contrary to conventional wisdom, the Federal Reserve is extensively audited. Politicians on the left and right of a populist ... Read Full Answer >>
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    The U.S. Treasury decides to print money in the United States as it owns and operates printing presses. However, the Federal ... Read Full Answer >>
  4. Why do some people claim the Federal Reserve is unconstitutional?

    The U.S. Constitution does not mention the need for a central bank, nor does it explicitly grant the government the power ... Read Full Answer >>
  5. How can the federal reserve increase aggregate demand?

    The Federal Reserve can increase aggregate demand in indirect ways by lowering interest rates. Aggregate demand is a measure ... Read Full Answer >>
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