And once the reserve market is already in place, primary and secondary reserves
shall still be procured via firm contracts; while tertiary reserves may be done either through contracts or through trade or purchase from the market.
The collateral and loan privileges built up in cash values provide "quick assets and the world's best secondary reserves
Perceptions of the respondents on the effect of changes in monetary policy between 1980-1985 and 1986-1991 on the banks meeting the condition of secondary reserves indicated significant differences on the following: fluctuations in loan demand (t=3.45) and fluctuation in deposit (t=2.51).
3.3 ability of the bank to meet the conditions of secondary reserve
In the synchronous area of the continental Europe (UCTE area) the requirements for reserve capacities are given separately for the primary reserve and the secondary reserve .
The size of the secondary reserve to be held by each country is not precisely defined by UCTE.
The size of the tertiary reserve (manual reserve) in UCTE is directly related to the secondary reserve as the purpose of this reserve is to free up the secondary reserve shortly after they are activated.
From a financial system standpoint, a secondary reserve buffer cannot provide liquidity in times of stress without access to a method to increase quickly the quantity of base money.
Antipathy toward the call loan market and its de facto use as a secondary reserve was a central common element among the key critics of the financial system.
The secondary reserves
of the commercial banking system, which are established by short-term bank loans, accumulate currently in bank short-term portfolios, the aggregate numeraire value of which tends toward the numeraire value of the initial money stock.
Carter is also convincing in pointing out the futility of earmarking secondary reserves to meet cash withdrawals in a general or competitive crisis.
Carter points out that the secondary reserve function of normally liquid credit assets was dissipated in a general or competitive crisis, so holding large amounts of liquid assets, instead of more direct loans, was a misallocation of bank credit.