All of these may have seasonal patterns.įinally, it’s impossible not to see the mountain of cash early in 2000. And there is also cash demand management with some precautionary buffers for unexpected withdrawals. This in part has to do with reserve requirements, as vault cash qualifies as reserves and can fill in when other components are harder to come by. Note that cash holdings are highest in January and February every year, peaking in mid-February. Should that not be the case, the Federal Reserve can provide the required cash as a loan, as long as the bank is solvent.
Under normal times, only a fraction of deposits are claimed at any moment, so the remaining cash in the banks is plenty to cover the demand. This doesn’t seem like a lot, as many people have more than that deposited in an account.Ī principal function of banks, of course, is to provide loans and they use your deposits for this purpose. The graph shows that banks hold about $75 billion in their vaults at any moment, which translates to about $230 for each U.S. (In other words, whether your bank is capable of providing you with all the cash for your deposits.) We can’t give details about your bank specifically, but we do have statistics for the banking system as a whole. Have you ever wondered how much cash sits in a bank vault? Even if you’re not planning a robbery, you may still be interested in how much liquidity is out there.
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