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Napanee, Ontario | I always love your input on these threads Idea, between you and W trying to "aha" people, it's always a good laugh.
perhaps you didn't read that this is a hypothetical question. ie - how banks normally operate, and as such, warrants an answer based on normal conditions.
Banks sitting on record reserve balances is not a normal condition. NORMALLY, the procedure is to operate close to the reserve requirement threshold to maximize efficiency and profitability. See how the red line and the blue line track each other for the last 45 years? Yes, banks DO operate close to their reserve requirements. But by all means, keep trying for your "aha" moment like W does.
Edited by OldMcdonald 12/13/2014 08:55
 (1reserves.jpg)
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 1reserves.jpg (76KB - 199 downloads)
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Banking, one more time....
