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Economic Commentary

CRR and Monetary Control

All depository institutions are required by law to hold reserves in proportion to certain deposit liabilities, to be kept either as cash in their vaults, or on deposit with Federal Reserve Banks. Because these required reserves comprise the bulk of all reserves held by the banking system, the demand for reserves in the federal funds market is closely linked to the volume of deposits.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Pakko, Michael. 1985. “CRR and Monetary Control.” Federal Reserve Bank of Cleveland, Economic Commentary 5/15/1985.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International