Mandatory Reserve
/ˈmændətɔːri rɪˈzɜrv/
Definitions
- (n.) A regulatory requirement compelling financial institutions to keep a specified portion of their deposits as a non-lendable reserve.
Banks must maintain a mandatory reserve to ensure liquidity and financial stability.
Forms
- mandatory reserve
Related terms
See also
Commentary
Typically used in banking law and financial regulation contexts; important for ensuring systemic stability and preventing overextension of credit.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.