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Bank reserves are a commercial bank's cash holdings physically held by the bank, and deposits held in the bank's account with the central bank. In most countries, the central bank may set minimum reserve requirements that mandate commercial banks under their purview to hold cash or deposits at the central bank equivalent to at least a prescribed percentage of their liabilities, such as c

The credit channel mechanism of monetary policy describes the theory that a central bank's policy changes affect the amount of credit that banks issue to firms and consumers for purchases, which in turn affects the real economy.

Financial repression refers to government implementation of policies to channel domestic funds to the public sector that in a deregulated market environment would go elsewhere. These policies are used to reduce the government's debt-to-GDP ratio.

Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the commercial bank's reserve, is generally determined by the central bank on the basis of a specified proportion of deposit liabilities of the bank. This rate is commonly referred to as the cash reserve ratio or sh