This locks up cash that banks could otherwise lend out.
The two also lend out shares used by others to short.
If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit.
It creates a contradiction that, on the one hand, the large amounts of funds in bank are unable to lend out, and on the other hand, the SMEs have many obstacles to obtain the credit support.
But customers may lend out any given title only one time for a total of 14 days and they cannot read it on their own Nook while it is lent.
In 2001 it announced "quantitative easing" : through large-scale purchases of government bonds, it would fill the Banks with excess reserves that it hoped they would lend out, stimulating loan growth.
