Distinguish between reserve requirement and marginal requirement policies of central bank
Reserve requirement refers to specific proportion of commercial bank deposits held by the central bank not allowed to lent and meant to cover possible withdraws or minimum percentage of deposits that a bank must hold in reserve to comply with regulation requirements
Whereas margin requirement refers to the difference between the current value of the security offered for loan (called collateral) and the value of loan granted.
CATEGORIES Economics
TAGS Dr. Bbosa Science