Total Legal Reserves

The practice of holding reserves began with the first commercial banks in the early 19th century. Each bank had its own banknote, which was only used in its geographical area of activity. Exchanging it for another note in another region was expensive and risky because the other bank had no information about the funds. It`s Mondays. Imagine you`re the general counsel of a publicly traded company and you have to go to the CFO`s office for a Monday morning meeting. Your news? Your biggest competitor is suing you for patent infringement related to your best-selling product. They break the news as the CFO sits in her chair, a worried look at her face. She does not hesitate to ask her first question: “What legal reserves do we need?” As a GC, you focus on defending the business. But as CFO, she worries about the company`s financial well-being and the impact this case may have on financial statements. Have you also considered the financial impact of a possible loss? In addition to the accounting aspect of legal reserves, we will also examine the importance of developing and maintaining valuation skills as a means of developing a competitive advantage. Finally, we connect the dots between legal reserves, litigation insurance and litigation finance and help you understand how companies can manage and transfer legal risk holistically.

1. Total trading accounts include demand deposits, automatic transfer service (ATS) accounts, NOW accounts, stock accounts, pre-authorized telephone or remittance accounts, unauthorized bankers` acceptances and affiliate bonds that mature in seven days or less. Net transaction accounts are the total of operating accounts minus amounts owed by other custodian banks and minus cash items in the collection process. A more detailed description of these types of deposits can be found on Form FR 2900 under www.federalreserve.gov/apps/reportforms/default.aspx Back to table The following list includes regulatory amendments relating to reserve requirements and indexation of the low reserve tranche and reserve exemption from 1 December 1959 and their impact on reserve requirements. The calculation of excess reserves can be done as follows – excess reserves refer to the amount held or deposited with the main or central regulator (in India, Reserve Bank of India) beyond legal requirements. If the reserves are positive, it simply means that the bank has kept the amount in the reserves beyond the legal obligation and vice versa. In case of zero, no deficit or surplus reserves are held. Correction – November 26, 2021: An earlier version of this article misstated the date when the Federal Reserve began paying interest to banks on excess reserves.

In the coming weeks, we will publish a series of articles dealing with legal reserves. We will discuss appropriate reporting systems, review disclosures and reports presented in the financial statements, and discuss the business case for accurate reserves. We will focus this series on the risk of loss lens for legal risks below AUC 450. 106. With effect for the period of constitution from the 26th. In March 2020, the reserve requirement ratio was reduced from 10% to net deposits on operations above the level of the low reserve tranche to 0%, and the reserve requirement ratio of 3% to net deposits on operations of the low reserve tranche to 0%. This reduced reserve requirements by about $200 billion. 105. Effective with the reserve maintenance period beginning December 27, 2012, the low reserve tranche for the net operating accounts will increase from $71.0 million to $79.5 million.

The exemption from the reserve requirement will increase from $11.5 million to $12.4 million. These measures will reduce the total reserve requirement by approximately $971 million. 104. With effect for the maintenance period, which expires on the 29th. In December 2011, the low reserve portion for net operating accounts will increase from $58.8 million to $71.0 million. The exemption from the reserve requirement will increase from $10.7 million to $11.5 million. These measures will reduce total reserve requirements by approximately $1.33 billion. 103. Effective with the reserve maintenance period beginning December 30, 2010, the low reserve portion for the net operating accounts increased from $55.2 million to $58.8 million.

The exemption from the reserve requirement remained at $10.7 million. These measures reduced the total required reserves by approximately $353 million. 102. Effective with the reserve maintenance period beginning December 31, 2009, the low reserve portion for the net operating accounts increased from $44.4 million to $55.2 million. The exemption from the reserve requirement increased from $10.3 million to $10.7 million. These measures reduced the total required reserves by approximately $1.24 billion. 101. Effective with the reserve maintenance period beginning January 1, 2009, the low reserve portion for the net operating accounts increased from $43.9 million to $44.4 million. The exemption from the reserve requirement increased from $9.3 million to $10.3 million.

These measures have reduced the total reserve requirement by approximately $270 million. 100. Effective with the maintenance period beginning on 20 December 2007, the low reserve portion for the net operating accounts was reduced from $45.8 million to $43.9 million. The exemption from the reserve requirement increased from $8.5 million to $9.3 million. These measures increased the required reserves by approximately $57 million. 99. Effective for the maintenance period, which began on 21 December 2006, the low reserve tranche for the net accounts was reduced from USD 48.3 million to USD 45.8 million. The exemption from the reserve requirement increased from $7.8 million to $8.5 million. These measures increased the required reserves by approximately $146 million. 98. Effective with the reserve maintenance period beginning December 22, 2005, the low reserve tranche for the net accounts increased from $47.6 million to $48.3 million.

The exemption from the reserve requirement increased from $7.0 million to $7.8 million. These measures reduced the total reserve requirement by approximately $369 million. 97. Effective with the maintenance period beginning on 23 December 2004, the low reserve portion for the net operating accounts increased from $45.4 million to $47.6 million. The exemption from the reserve requirement increased from $6.6 million to $7.0 million. These measures reduced the total reserve requirements by approximately $506 million. 96. Effective with the maintenance period beginning on 25 December 2003, the low reserve portion for the net operating accounts increased from $42.1 million to $45.4 million. The reserve exemption increased from $6.0 million to $6.6 million. These measures reduced the total reserve requirement by approximately $689 million.

95. With effect for the maintenance period, which expires on the 26th. In December 2002, the low reserve tranche for net operating accounts increased from $41.3 million to $42.1 million. The exemption from the reserve requirement increased from $5.57 million to $6.0 million. These measures reduced the total reserve requirement by approximately $201 million. 94. Effective with the maintenance period beginning on 27 December 2001, the low reserve tranche for the net accounts was reduced from $42.8 million to $41.3 million. The exemption from the reserve requirement increased from $5.5 million to $5.7 million. These measures increased the required reserves by approximately $154 million. 93. Effective with the maintenance period beginning on 28 December 2000, the low reserve tranche for the net operating accounts was reduced from $44.3 million to $42.8 million. The exemption from the reserve requirement increased from $5.0 million to $5.5 million.

The measures required reserves estimated at $60 million. 92. Effective with the maintenance period beginning 30 December 1999, the low reserve portion for the net operating accounts was reduced from $46.5 million to $44.3 million. The reserve exemption increased from $4.9 million to $5.0 million. The measures required reserves estimated at $264 million. 91. Effective with the maintenance period beginning on 31 December 1998, the low reserve portion for the net operating accounts was reduced from $47.8 million to $46.5 million.