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The percentage of deposits in the form of cash that, by law, banks must set aside in their vaults or with their central bank. Lowering or raising this requirement influences the money supply. A reduction in reserve requirements enables banks to increase lending while an increase forces them to reduce lending. Sometimes known as minimum reserve requirements, registered reserves or reserve ratio.
See also: http://www.federalreserve.gov/monetarypolicy/reservereq.htm#table1