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→Reserve requirements
===Reserve requirements===
===Reserve requirements===
A reserve requirement is that portion of a bank's daily receipts in deposits that must be held in reserve and not available for its daily lending activities. By tightening reserve requirements, less money is available for lending, and by loosening reserve requirements more money is available for business and consumer lending.
A reserve requirement is that portion of a bank's daily receipts in deposits that must be held in reserve and not available for its daily lending activities. By tightening reserve requirements, less money is available for lending, and by loosening reserve requirements more money is available for business and consumer lending.<ref>Typically, the reserve requirement is somewhere around 6%, but can be adjusted up or down. A radical upward adjustment in reserve requirements in a banking crisis can force some banks out of business, or cause banking mergers.</ref>
===Discount rate===
===Discount rate===