Secondary Reserves

AAA

DEFINITION of 'Secondary Reserves'

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.

INVESTOPEDIA EXPLAINS 'Secondary Reserves'

Secondary reserves are often deposited in short-term instruments that can quickly be converted to cash when additional liquidity is required. However, they are not listed separately on the balance sheet.

Secondary reserves differ from legal reserves in their ability to earn interest.

RELATED TERMS
  1. Voluntary Reserve

    Monetary reserves voluntarily held by insurance companies. Government ...
  2. Primary Reserves

    The minimum amount of cash required to operate a bank. Primary ...
  3. Cash Reserves

    In finance, cash reserves primarily refers to two things. One ...
  4. Bank Capital

    The difference between the value of a bank's assets and its liabilities. ...
  5. Free Reserves

    A measurement of a bank's reserves that is equal to the difference ...
  6. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
Related Articles
  1. Spotting Profitability With ROCE
    Fundamental Analysis

    Spotting Profitability With ROCE

  2. Burn Rate Key Factor In Company's Sustainability
    Markets

    Burn Rate Key Factor In Company's Sustainability

  3. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

  4. How To Efficiently Read An Annual Report
    Markets

    How To Efficiently Read An Annual Report

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center