Total reserve holdings over and above required reserves constitute the minimum amount of loans a depository institution can make.

Question

Quizplus · Accepted Answer

Total reserve holdings over and above required reserves do not necessarily constitute the minimum amount of loans a depository institution can make. The amount of loans a depository institution can make is also influenced by factors such as its capital position, creditworthiness of borrowers, and market demand for loans.

Total Reserve Holdings Over and Above Required Reserves Constitute the Minimum