what are bank reserves 
bank reserves are the cash minimums that financial institutions must have on hand in order to meet central bank requirements this is real paper money that must be kept by the bank in a vault on site or held in its account at the central bank cash reserves requirements are intended to ensure that every bank can meet any large and unexpected demand for withdrawals in the u s the federal reserve dictates the amount of cash called the reserve ratio that each bank must maintain historically the reserve ratio has ranged from zero to 10 of bank deposits 1