Plausibly Exogenous [1456] - Reserve Requirements (01/26/2024)
LHS Variable
Bank lending
RHS Variable
Reserve requirements
Source of Exogenous Variation
When the Federal Reserve System was established in 1913, it permitted state-chartered banks to become Federal Reserve members if they met the standards of the Federal Reserve System. In 1936 and early 1937, when the Federal Reserve increased the required reserve ratio, the policy affected the reserves of member banks while it did not affect the reserves of nonmember banks.
- Park and Van Horn (2015), “Did the Reserve Requirement Increases of 1936–37 Reduce Bank Lending? Evidence from a Quasi‐Experiment”