Increase in the reserve requirement

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Reference no: EM13806679

Suppose the Federal Reserve increases the reserve requirement from 10% to 15%. Does this change make banks financial position safer or riskier? Are there any downsides to this change from the bank's perspective? Can you think of any analogous changes in other business situations (e.g., insurance) that are comparable to this increase in the reserve requirement?

Reference no: EM13806679

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