Reserve ratios further definitions

Quarterly Bulletin 1971 Q4
Published on 01 December 1971

Reserve ratios for banks and finance houses, which came into effect on 16th September, were described in a supplement entitled Reserve ratios and Special Deposits issued with the September Bulletin. All banks in the United Kingdom have agreed to maintain minimum reserve ratios of 12t% and finance houses at least 10%. The discount houses, and a few other firms doing similar business are not subject to reserve ratios but have agreed to keep at least 50% of their borrowed funds in defined categories of public sector debt. This article describes more fully the categories of assets and liabilities included in these ratios, and gives details of the ratios at the third Wednesday in September and October this year.

The reserve ratios, which cannot be derived from the various series of banking statistics already published, are calculated from figures for "eligible liabilities" and "reserve assets" defined uniformly for all banks.

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