A depository institution can run a deficiency in its legal reserve account at the Federal Reserve provided that deficiency does not exceed 5 percent and provided another deficiency is not recorded in the same month.

Question

Quizplus · Accepted Answer

Depository institutions are required to maintain reserve balances with the Federal Reserve, and they must rectify any deficiencies in their reserve account by the calculation period's end. They cannot intentionally maintain a deficiency, regardless of the percentage or frequency.

A Depository Institution Can Run a Deficiency in Its Legal