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Topic: Checkable deposit

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	Chapter 18
		Assumptions include: all liabilities are checkable deposits, depository institutions do not keep excess reserves; people desire to hold only additional checkable deposits and do not want to hold additional currency, and all assets are either reserves or loans.
		When the proceeds of the loan are spent, these funds end up as deposits possibly in a different depository institution(remember that we are assuming that none of the proceeds of the loan end up as currency).
		During bank panics, people want to shift from checkable deposits to currency by withdrawing currency from banks--thus bank panics lead to a substantial increase in C/D. When engaged in illegal activity, most people do not conduct transactions using checks; instead they are more likely to conduct illegal activities using currency.
	www.ndsu.nodak.edu /instruct/swandal/ECON324f/notes/chp18.htm (1722 words)

	St. Louis Fed: Sweeps Distort M1 Growth
		The average offering rate on other checkable deposits (OCD) at the approximately 425 banks surveyed by the Federal Reserve during August was about the same as the fourth quarter of last year, 1.90 percent, while yields on both money market mutual funds and small time deposits were about 65 to 70 basis points higher.
		To avoid the MMDA being classified for reserve purposes as a transaction deposit, all funds are moved from the MMDA to the checkable deposit on the sixth transfer during the month.
		Checkable deposits held by larger depository institutions at the close of business are subject to a 10 percent marginal reserve requirement, while MMDA accounts have a zero requirement.
	research.stlouisfed.org /aggreg/sweeps.html (458 words)

	NESARA-Frequently Asked Questions about Banking
		Again, checkable deposits in commercial banks and savings institutions are debts—liabilities of these depository institutions to their depositors.
		A deposit created through lending is a debt that has to be paid on demand of the depositor, just the same as the debt arising from a customer’s deposit of checks or currency in a bank.
		That is, with a checkable deposit, the deposit is payable on demand.
	nesara.org /articles/rabbits-banking.htm (3452 words)

	Modern Money Mechanics
		But, as the buyers of the securities pay for them with funds in their deposit accounts in the same or other banks, the net result is a $9,000 decline in securities and deposits at all banks.
		Bank deposits decline $100 because the customer pays for the currency with a check on his or her transaction deposit; and the bank's currency (vault cash reserves) is also reduced $100.
		Other banks receive these deposits and can increase their loans accordingly, but the banks that lost them may not be able to reduce outstanding loans or investments in order to restore their reserves to required levels within the required time period.
	landru.i-link-2.net /monques/mmm2.html (13216 words)

	Lecture 12
		Since checkable deposits are acceptable as a medium of exchange, it is money.
		checkable deposit in financial institutions against which checks can be written and which earns no interest.
		That means that Banks have to have either in their safe-boxes or in their deposits in the Fed. 20 percent of all deposits.
	tigger.uic.edu /~adsera/Money1.htm (3214 words)

	Boom and Bust
		Because the central bank allows banks to hold only a fraction of the funds in their checkable deposits as cash, money newly created by the central bank can be lent and deposited over and over.
		During the boom, banks' balance sheets swell with loans on the asset side, balanced by checkable deposits on the liability side.
		The swollen liabilities of checkable deposits are payable on demand to customers while the matching assets of loans are not recoverable on demand by banks.
	www.mises.org /freemarket_detail.asp?control=46 (2817 words)

	Economics 330
		When the currency to checkable deposit ratio increases this implies that depositors are converting some of their checkable deposits into currency and this implies that less multiple expansion occurs
		An increase in the excess reserve to checkable deposit ratio means that the banking system is effectively using more of its reserves to support a given level of checkable deposits.
		This underlines the importance of the currency to checkable deposit ratio and the excess reserve to checkable deposit ratio during bank panics
	www.ssc.wisc.edu /~ekelly/econ330/economics330lecture11spring2002.htm (1842 words)

	Demand account - Wikipedia, the free encyclopedia
		A demand account (North America: checking account or chequing account, UK and Commonwealth: current account) is a deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels.
		An account holder may either apply for a permanent one, or the financial institution may, at its sole discretion, provide a temporary overdraft on an ad-hoc basis.
		Unlike savings accounts where the primary reason for depositing money is to generate interest, the main function of a demand account is transactional therefore most providers either pay no interest or pay a low level of interest on credit balances.
	en.wikipedia.org /wiki/Checkable_deposit (657 words)

	Transaction deposit - Wikipedia, the free encyclopedia
		In the United States transactions deposit is a term used by the Federal Reserve for checkable deposits and other accounts that can be used directly as cash without withdrawal limits or restrictions.
		They are the only bank deposits that require the bank to keep reserves at the central bank.
		Transaction accounts include all deposits against which the account holder is permitted a make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third persons or others.
	en.wikipedia.org /wiki/Transaction_deposit (182 words)

	Regulation Y - Bank Holding Companies
		To the contrary, the term must be viewed as distinguishing between deposit taking and lending activities and treating demand deposit-taking as a separate activity from general deposit-taking and commercial lending as separate from the general lending category.
		With respect to deposits, the Committee recognizes that it is legitimate for an institution currently involved in offering demand deposits or other third party transaction accounts to make use of new technologies that are in the process of replacing the existing check- based, paper payment system.
		For example, if a nonbank bank was jointly marketing on March 5, 1987, a 3 year, $5,000 certificate of deposit, this bill would not prohibit offering in the same manner a 1 year, $2,000 certificate of deposit with a different interest rate.
	www.bankersonline.com /regs/225/225-145.html (4203 words)

	[No title]
		Checkable deposits - allow the owner of the deposit (the bank customer) to write checks to third parties.
		Prior to that, banks could not compete for checkable accounts since interest could not be paid on checkable accounts.
		Checkable accounts have decreased from 61 percent in 1960 to 11 percent on 1999.
	arapaho.nsuok.edu /~hileman/ECON3013/mbchap9.htm (1451 words)

	Components of Money.html
		A checkable deposit the balance on which is maintained at an agreed level by transferring funds from a savings account.
		Deposits of $100,000 or less are considered to be small.
		Deposits of $100,000 or more are considered to be large.
	www.stchas.edu /faculty/gbowling/macro/ComponentsofMoney.html (247 words)

	Eco 200 chapter 14 (Site not responding. Last check: 2007-10-12)
		This means that banks are required to keep only a fraction of deposits on hand to satisfy withdrawals.
		Banks are required by law to keep a certain percent of deposits as reserves.
		Suppose the bank lends the excess $64 to Frank, increasing deposits to $180 + $64 = $244.
	www.oswego.edu /~spizman/eco200ch14.html (1171 words)

	[No title]
		Formula for monetary or checkable deposit multiplier is Monetary multiplier = 1/required reserve ratio or m = 1/R or 1/.20 in our example.
		Reserves deposited at the Fed are a liability to the Fed because they are funds it owes; they are claims that commercial banks have against it.
		Although demand deposits fall by the amount of cash withdrawn, the remaining demand deposits are too high relative to the reduced reserves.
	staffwww.fullcoll.edu /aturner/Chap014.doc (4252 words)

	Are you being hounded by creditors at work or home (Site not responding. Last check: 2007-10-12)
		The borrower created $10,000 in new money by virtue of the promissory note; the bank deposited the promissory note as a new deposit worth $10,000; the bank loaned the borrower the $10,000 he just created for the bank by virtue of the promissory note; the borrower will also pay back an additional $10,000 plus interest.
		Checkable deposits are owned, not owed, by the bank's customers.
		This checkable deposit, like any other check that is deposited, is also a liability of the bank and is owned by the depositor, who is also the borrower.
	www.cfs-gc.com /Creditor/BasicsOfCredit.htm (5468 words)

	Untitled (Site not responding. Last check: 2007-10-12)
		They are also required to hold a fraction of their deposits with the Fed. This minimum quantity they have to deposit at the Fed is called "required reserves".
		The fraction of deposits that must be kept at the Fed is given by the "required reserve ratio".
		Empirical studies show that there is a fairly stable relationship between currency and checkable deposits - the ratio of the two is almost constant.
	www.sba.oakland.edu /faculty/mukherji/lect10.htm (2064 words)

	Macroeconomic Agenda for Recovery Now and a Democratic Comeback in 2004
		Checkable deposits and currency are roughly equal parts of what the Fed calls "M1".
		In our present fractional-reserve, credit-money system, checkable deposit money is created by banks ("out of thin air"), by an ingenious accounting sleight-of-hand, in the process of making loans.
		As a result, reserve deposits at the Fed are now only about $9 billion for the $570 billion of checkable deposits.
	www.iea-macro-economics.org /dem_ecpol_2004.html (9917 words)

	FRB: H.6 Release--Performance Evaluation (Site not responding. Last check: 2007-10-12)
		The FR 2915 is used to subtract the foreign currency deposits from the appropriate deposit category when compiling the monetary aggregates.
		Demand deposits due to depository institutions in the United States and the U.S. government, as well as other demand deposits and CIPC are reported on the FR 2900 and, for institutions that do not file an FR 2900, are estimated using quarterly Call Reports.
		Certificates of deposits (CDs) held by MMMFs as well as the nontransaction deposits of the U.S. government, U.S. and foreign depository institutions, and foreign official institutions are subtracted from gross large time deposits at commercial banks.
	www.federalreserve.gov /releases/H6/perfeval2003.htm (3522 words)

	[No title]
		Joan deposits Mary's check for $8,000 in her account in Bank B. Show the changes on the balance sheet for both Bank A and Bank B Bank A Bank B Assets Liabilities Assets Liabilities Reserves_____ Checkable Deposits_____ Reserves______ Checkable Deposits______ Loans _____ Loans ______ 4.
		The more (less) checkable deposits people choose to hold and the less (more) currency people choose to hold, the greater (lower) is the money supply.
		Assume that Bank A has $10,000 in checkable deposits, $2000 in reserves, and $8,000 in loans when the reserve requirement is 20%.
	daphne.palomar.edu /llee/101Chapter21.doc (5990 words)

	The Money Supply Process
		What usually happens when a loan is made is that the borrower issues a claim against him-/herself in the form of a promissory note; in exchange the bank issues a claim against itself in the form of an addition to the borrower's checkable deposit account.
		The consequence is that when checks written by borrowers against the increments to their deposit accounts clear the system, the bank finds itself in a deficiency reserve position.
		But it is constrained either by law (a legal reserve requirement) or by prudence (the need to maintain the confidence of the public in the bank's ability to meet withdrawal requests upon demand) to issuing loans which are no greater in total than the excess of its required or desired reserves, whichever is greater.
	facweb.furman.edu /~dstanford/mbnotes/mbnote14.htm (1404 words)

	Untitled Document
		A checkable deposit is a loan to a bank that the bank promises to pay back to the depositor:
		Deposit accounts on which a check can be written.
		A deposit that technically cannot be withdrawn on demand.
	community.middlebury.edu /~horlache/Macro-k/hlect/Money94.html (4225 words)

	Re: How does the central bank create new money?
		They have, and there accordingly is. >But as long as >borrowers have different lenders to choose from and lenders have to >compete on rates and terms there's no rent seeking.
		The interest rate on checkable deposits is held artificially low by law.
		Banks are therefore privileged to charge market rate on loans, but pay less than market rate for deposits, an obvious example of economic rent.
	www.talkaboutinvestments.com /group/sci.econ/messages/201854.html (1666 words)

	[No title] (Site not responding. Last check: 2007-10-12)
		B) the effect on deposits will be the same as if the bank had held its excess reserves in vault cash.
		E) M1 decreases and M2 increases 12) If the required reserve ratio is ten percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the excess reserves-checkable deposit ratio is A) 0.01.
		E) all of the above 15) If either Treasury deposits or foreign deposits at the Fed are predicted to temporarily rise, then a _____ open market _____ would be needed to offset the expected _____ in reserves and the monetary base.
	econ.bu.edu /MorenoBadia/EC342/EC342exams/EC342samplemidtermF100.doc (1446 words)

	Monetary Analysis Exams
		As a result of these now deposits the bank will now have $______ of total new reserves, of which $______ will be required and $_______ will be excess.
		Increases in Treasury deposits at the Fed deny reserves to the financial intermediaries and/or currency to the public.
		From 1930 to 1940, the trend in the t-ratio was that of a constant decline.
	krypton.mnsu.edu /~schimr/web/maexams.html (2557 words)

	FDIC: FDIC Law, Regulations, Related Acts - Bank Holding Company Act
		(ii) The Board also considers nondemand deposits withdrawable by check or other similar means for payment to third parties or others to constitute a separate line of business for purposes of applying the activity limitation.
		With respect to deposits, the Committee recognizes that it is legitimate for an institution currently involved in offering demand deposits or other third party transaction accounts to make use of new technologies that are in the process of replacing the existing check-based, paper payment system.
		Again, however, the Committee does not believe that technology should be used as a lever for an institution that was only incidentially involved in the payment system to transform itself into a significant offeror of transaction account capability.
	www.fdic.gov /regulations/laws/rules/6000-2480.html (6983 words)

	IEA: Towards the Integration of Economic Science -- IDMF Model
		Conceptually, the Credit Market is an all inclusive "bank" where everyone deposits their financial saving (other than checkable deposits and currency) and from which everyone borrows money to finance GNP spending.
		This way of looking at money treats the process of money creation as merely a static dual (T-account) credit transaction in which the bank's deposit liability is exchanged for the borrower's note, and the bank's note asset is exchanged for the borrower's checkable deposit asset.
		The financial deregulation which permits both interest payments on checkable deposits and limited third-party checking on money market accounts, has fuzzed the empirical separation of money and credit.
	www.iea-macro-economics.org /int-ec-sci-idmf.html (3470 words)

	ECON 229 FINAL (Site not responding. Last check: 2007-10-12)
		When $1 million is deposited at a bank with a required reserve ratio of 20 percents and the bank chooses not to make any loans but to hold excess reserves instead, then, in the bank's final balance sheet,
		Suppose an individual deposits $100 in currency in a profit maximizing bank with a reserve requirement of r =.2.
		Banks generate a lot of service income from charges on their checkable deposit liabilities which increases their bottom line.
	www.missouri.edu /~econdon/exam/xmws95.htm (2594 words)

	Basic Lecture Notes for Hall and Taylor, Chapter 5
		Currency issued by the Fed (U.S. dollar bills and coins) in public circulation, plus travelers' checks held by the public, plus demand deposits (non-interest bearing checkable deposit accounts) held by the public, plus interest-bearing checkable deposit accounts held by the public.
		In somewhat simplified form, M1 can be represented as the sum of currency (U.S. dollar bills and coins) in public circulation, denoted by CU, plus checkable deposit accounts held by the public, denoted by DEP.
		For example, a sale by the Fed of a U.S. Treasury bill to a U.S. citizen in exchange for dollars means that there is a contraction in the amount of currency in circulation, hence a contraction in Mb.
	www.econ.iastate.edu /classes/econ302/tesfatsion/bht5.htm (2216 words)

	[No title] (Site not responding. Last check: 2007-10-12)
		13) In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed A) sold $200 in government bonds.
		a) Using T-accounts, show how $200 deposited in the Bank of the Rock multiplies in the banking system, in the form of checkable deposits, reserves and loans (hint: you will need three T-accounts, one for each bank).
		b) Find the increase in deposits from this three-bank system (assume loans from the 3rd Rate Bank of Jericho are deposited in the 4th Rate Bank of McMahon).
	www3.niu.edu /~ta0jfr1/310prepexam2.doc (2191 words)

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