Large Excess Reserves in the U.S.: A View from the Cross-Section of Banks

FRB Richmond Working Paper No. 12-05

46 Pages Posted: 20 Dec 2012

See all articles by Huberto M. Ennis

Huberto M. Ennis

Federal Reserve Banks - Federal Reserve Bank of Richmond

Alexander L. Wolman

Federal Reserve Bank of Richmond

Date Written: August 24, 2012

Abstract

Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. These events required major adjustments in banks' balance sheets. We study the evolution of reserve holdings across banks from the fall of 2008 until the middle of 2011 and document how banks' balance sheets changed concurrently. Motivated by the potential implications for monetary policy of operating with a high level of reserves, we focus particular attention on those banks which accumulated large quantities of reserves.

Keywords: bank balance sheets, bank reserves, liquidity, monetary policy, bank capital

JEL Classification: G21, E44, E58

Suggested Citation

Ennis, Huberto M. and Wolman, Alexander L., Large Excess Reserves in the U.S.: A View from the Cross-Section of Banks (August 24, 2012). FRB Richmond Working Paper No. 12-05. Available at SSRN: https://ssrn.com/abstract=2191170 or http://dx.doi.org/10.2139/ssrn.2191170

Huberto M. Ennis (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Alexander L. Wolman

Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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