A bank can make new loans as long as it has

Question

Quizplus · Accepted Answer

A bank can make new loans as long as it has excess reserves, which are reserves held by a bank that are above the required amount set by regulators. This means that the bank has additional funds available that it can lend out to borrowers. Required reserves are the minimum amount of reserves that a bank is required to hold by regulators, which are based on the bank's deposits. Capital is a measure of a bank's financial strength and does not directly impact its ability to make new loans.

A Bank Can Make New Loans as Long as It