Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Bank holding
them.

Question

Quizplus · Accepted Answer

Commercial bank reserves represent funds held by commercial banks at the Federal Reserve Bank, and are counted as assets on the banks' balance sheets. However, they are considered liabilities for the Federal Reserve Bank, because the reserves represent funds that the Federal Reserve owes to the commercial banks.

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