For what reason do banks hold reserves?
A)to meet safety objectives
B)to meet liquidity objectives
C)to meet Federal Reserve requirements
D)All of the above are correct

Question

Quizplus · Accepted Answer

Banks hold reserves for multiple reasons, including safety objectives to protect against unexpected losses, liquidity objectives to meet customer withdrawals and loan demands, and to meet Federal Reserve requirements for maintaining a minimum reserve ratio.

For What Reason Do Banks Hold Reserves