18-108 In situations where the required reserve shortfall exceeds 4 percent,the bank may be

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In situations where the required reserve shortfall exceeds 4%, the bank may be assessed explicit monetary penalties by the Federal Reserve Bank and/or assessed implicit penalties in the form of more frequent monitoring and examinations. They may also be allowed to carry 4% of the required reserves to the next maintenance period. Option D (declared insolvent) is not a likely outcome for a shortfall in reserves.

18-108 in Situations Where the Required Reserve Shortfall Exceeds 4