Reserve Requirements
Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve bank.

Also known as "required reserves".

Investopedia Says:
Set by the Fed's board of governors, reserve requirements are one of the three main tools of monetary policy. The other two tools are open market operations and the discount rate.

Related Terms:
Bank Run
Discount Rate
Federal Funds Rate
Federal Reserve Bank
Federal Reserve Board - FRB
Federal Reserve Open Market Committee - FOMC
Fractional-Reserve Banking
Monetary Policy
Multiplier Effect
Open Market Operations

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