Obbligo di riserva
What Is Obbligo di riserva?
Obbligo di riserva, or reserve requirement, refers to the minimum amount of funds that commercial banks are mandated to hold in reserve by their central bank. This reserve, typically held as cash in the bank's vault or as deposits at the central bank, is a critical component of monetary policy. The primary purpose of an obbligo di riserva is to ensure that banks maintain sufficient liquidity to meet unexpected withdrawals and to influence the overall money supply within the financial system. By adjusting the reserve ratio, central banks can influence banks' lending capacity, thereby impacting interest rates, inflation, and ultimately, economic growth.
History and Origin
The concept of reserve requirements originated in the early 19th century as a means for individual banks to maintain sufficient cash to meet depositor demands. Prior to the establishment of central banking systems, banks held reserves voluntarily to ensure their stability. In the United States, formalized reserve requirements were introduced at the national level with the National Bank Act of 1863, which mandated that nationally chartered banks hold a percentage of their notes and deposits as reserves.14
With the creation of the Federal Reserve System in 1913, the power to set reserve requirements was granted to the Federal Reserve Board. Initially seen as a tool to ensure bank liquidity, the rationale evolved to also include its role in influencing credit conditions and monetary control. For decades, the Federal Reserve used reserve requirements as a key instrument. However, significant changes occurred, with the reserve requirement ratios for all depository institutions being reduced to zero percent effective March 26, 2020.13
Key Takeaways
- Obbligo di riserva is the minimum percentage of deposits that commercial banks must hold in reserve, as mandated by the central bank.
- It serves as a tool for central banks to manage the money supply, influence credit conditions, and ensure bank liquidity.
- By adjusting the reserve ratio, central banks can impact the amount of funds available for loans, thereby affecting economic activity.
- While historically a primary monetary policy tool, its importance has diminished in some major economies, like the United States, where reserve requirements are currently set to zero.
- The European Central Bank, among others, continues to implement minimum reserve requirements, albeit at a lower ratio.
Interpreting the Obbligo di riserva
The obbligo di riserva is typically expressed as a percentage of a bank's eligible liabilities, primarily customer deposits. For instance, if the reserve ratio is 1% and a bank has €100 million in eligible deposits, it must hold €1 million in reserves with its national central bank. Thi12s requirement is generally calculated over a "maintenance period," allowing banks some flexibility to manage their daily balances as long as the average meets the requirement.
A 11higher obbligo di riserva means banks must hold more funds in reserve, reducing the amount available for lending. Conversely, a lower requirement frees up more capital for banks to extend loans, potentially stimulating economic activity. The actual impact also depends on how excess reserves—funds held by banks above the mandated minimum—are managed and remunerated by the central bank.
Hyp10othetical Example
Consider a new commercial bank, "Diversification Bank," that just opened. The central bank has set an obbligo di riserva (reserve requirement) of 1%.
- Initial Deposits: Diversification Bank receives €500 million in new customer deposits.
- Calculate Required Reserves: Based on the 1% obbligo di riserva, Diversification Bank must hold 1% of €500 million in reserve.
- Required Reserves = 0.01 * €500,000,000 = €5,000,000
- Available for Lending: The remaining amount is what the bank can potentially lend out.
- Available for Lending = Total Deposits - Required Reserves
- Available for Lending = €500,000,000 - €5,000,000 = €495,000,000
In this scenario, Diversification Bank must keep €5 million as reserves, either in its vault or deposited with the central bank, ensuring it has funds readily available and contributing to the stability of the financial system. The €495 million becomes available for new loans to individuals and businesses.
Practical Applications
The obbligo di riserva serves as a key tool for central banks to implement monetary policy. By altering the reserve ratio, monetary authorities can influence the money supply and manage liquidity within the banking sector.
For instance, the European Central Bank (ECB) requires credit institutions in the Euro area to hold minimum reserves with their national central banks. Since January 2012, this ratio has been set at 1% of certain liabilities, primarily customer deposits. This mechanism helps stab9ilize short-term money market rates and creates a structural demand for central bank money. Central banks can also us8e reserve requirements as a macroprudential tool to enhance the resilience of the financial system against liquidity shocks and to help contain systemic risks arising from broad-based credit growth. For example, an increase 7in the obbligo di riserva could contribute to moderating credit growth by widening the spread between lending and deposit rates.
Limitations and Criti6cisms
Despite its historical significance, the obbligo di riserva has faced limitations and criticisms, leading some major central banks to de-emphasize its role. One primary criticism is that changes to reserve requirements can have an abrupt and disruptive effect on banks with low excess reserves, often making other tools like open market operations or the discount rate preferable for frequent adjustments to monetary policy.
Furthermore, in an environment of abundant reserves, such as that created by quantitative easing, the impact of reserve requirements on banks' lending decisions or interest rates can become negligible. The Federal Reserve, for example, reduced reserve requirements to zero in 2020, acknowledging that they were no longer playing a significant role in monetary policy given the substantial level of reserves in the banking system., This shift reflects a br5oader trend among some central banks towards an "ample-reserves" framework, where the primary driver of the demand for reserves is the interest rate paid on those reserves rather than a mandated requirement. Some research suggests that while effective in certain contexts, particularly in emerging markets, reserve requirements can also act as a distortive tax on bank funding.
Obbligo di riserva vs4. Discount Rate
While both the obbligo di riserva and the discount rate are tools utilized by a central bank to influence the money supply and credit conditions, they operate through different mechanisms.
The Obbligo di riserva (reserve requirement) mandates the percentage of deposits that commercial banks must hold in reserve. By changing this percentage, the central bank directly alters the amount of funds available for banks to lend out, impacting their balance sheet and capacity for credit creation. A higher obbligo di riserva reduces loanable funds, while a lower one increases them.
The Discount Rate, on the other hand, is the interest rate at which commercial banks can borrow money directly from the central bank. It serves as a benchmark for short-term lending and can signal the central bank's stance on monetary policy. A lower discount rate encourages banks to borrow, increasing their reserves and lending capacity, while a higher rate discourages borrowing, tightening credit.
The key difference lies in their directness: the obbligo di riserva imposes a direct quantitative constraint on reserves, whereas the discount rate influences the cost of obtaining reserves from the central bank, affecting banks' willingness to borrow and lend.
FAQs
How does Obbligo di riserva affect the economy?
By increasing the obbligo di riserva, a central bank reduces the amount of money banks have available to lend, which can lead to higher interest rates and slow down economic growth. Conversely, lowering the requirement allows banks to lend more, potentially stimulating economic activity.
Do all central banks use reserve requirements today?
No. While many central banks around the world, including the European Central Bank, still utilize minimum reserve requirements, some, like the Federal Reserve in the United States, have reduced them to zero. This depends on the specific monetary policy framework and market conditions of each economy.
What happens if a bank fails to meet its Obbligo di riserva?
If a bank fails to meet its obbligo di riserva, it may face penalties from the central bank. These sanctions are typically proportional to the shortfall. Banks usually have some flexibility, as compliance is often determined based on average balances over a maintenance period rather than daily exact adherence.
Are reserve requirem3ents the same as bank capital requirements?
No. While both relate to bank stability, the obbligo di riserva (reserve requirement) dictates the minimum amount of liquid funds a bank must hold against its deposits to meet short-term obligations. Bank capital requirements specify the minimum amount of equity and other capital a bank must hold to absorb potential losses and protect depositors and the financial system from insolvency.
What is the current Obbligo di riserva in the Euro area?
As of recent updates, the European Central Bank maintains a minimum reserve ratio of 1% for credit institutions in the Euro area. This percentage is applie2d to certain liabilities, primarily customer deposits, to determine each bank's minimum reserve requirement.1