Without them, much of an economy's capital is held captive on balance sheets, tied up in inventory, working capital, and balance sheet reserves.
Lacking any Wall Street buyers for their mortgage loans, commercial banks are left to hold any mortgages they've made in the last few weeks on balance sheet, requiring funds and reserves against them.
It influences his ability to raise cash and find investors going forward if he has proved reserves on his balance sheet.
The balance sheet remains large, and the bank reserves created remain.
They cite the sharp increase in the size of the Fed's balance sheet and the recent expansion of bank reserves and money measures as prima facie evidence of looming inflation.
On the liability side of the balance sheet, to balance that, we create reserves in the banking system.
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Nowhere on the income statement, balance sheet or cash flow statement is there any mention of reserves or valuation allowances.
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Now we are only days from this year end with the same hope that the well can be made to flow by December 31, 2012 so that reserves can be added to the MMR balance sheet.
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All that the Fed really controls is its balance sheet, and the interest rate that it pays on bank reserves.
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The difference is that the 1979 move targeted money and, by implication, bank reserves, on the liability side of the Fed's balance sheet.
The privately owned gold held in Turkish commercial banks has shown up on the balance sheet for the central bank, resulting in news reports of inflated official-sector reserves in the country, the consultancy said.
They will decline in value, which will quickly make the Fed insolvent, and a further liability to the people of the US. So either the Fed sells the bonds and reduces bank reserves, further tightening an already tightening lending market, or it really weakens its balance sheet.
The accepted practice in bank accounting is to set up significant loan-loss reserves only when the commitment is availed of and the arrangement becomes an on-balance-sheet loan.
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