Chartered bank reserves are an asset to chartered banks but a liability to the Bank of Canada holding them.

Question

Quizplus · Accepted Answer

Chartered bank reserves are an asset to the commercial banks that hold them as they can use them to fulfill their own reserve requirements. However, these reserves are a liability to the Bank of Canada, as it is responsible for providing liquidity to the banking system when necessary.

Chartered Bank Reserves Are an Asset to Chartered Banks but a Liability