A commercial banking system is usually regulated by central banks. For instance, the European Central Bank (ECB)

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A commercial banking system is usually regulated by central banks. For instance, the European Central Bank (ECB) requires holding minimum reserves for banks located in the Euro area. Branches located outside the euro area are subject to minimum reserve requirements. How do central banks affect reserves in a banking system? Which actions are recommended and when? Can reserve requirements influence money supply and, hence, inflation in the economy?

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Financial Markets And Institutions

ISBN: 9781292215006

9th Global Edition

Authors: Stanley Eakins Frederic Mishkin

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