22 lines
714 B
Markdown
22 lines
714 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->
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# Bank Reserves
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## Definition
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The gold and silver money that banks must keep on hand to meet demands for redemption of their notes. The appropriate level of reserves depends on the quantity of notes in circulation and the confidence of the public.
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## Source Chapter
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Book II, Chapter 2
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## Context
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Smith explains how banks must maintain adequate reserves to meet demands for note redemption, analysing the relationship between reserves, circulation, and bank stability. He shows how excessive note issuance forces banks to maintain larger reserves.
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## Economic Domain
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Regulation
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---
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