Buffer reserves at DIs are
A)reserves in excess of the minimum required reserves.
B)government securities that do not qualify as required reserves, but that can be converted to cash quickly.
C)the portion of reserves that are calculated at a rate of ten percent of deposits.
D)non-government securities and loans that must be converted into cash.
E)the portion of life insurance company assets that require minimum reserves.

Question

Quizplus · Accepted Answer

Buffer reserves are government securities held by depository institutions that can be quickly converted to cash and do not qualify as required reserves but are held as a precautionary measure to meet unexpected liquidity needs.

Buffer Reserves at DIs Are