<p>The reserve requirement on deposits ensures that (for a given $reserve\ requirement(\%)$ and $deposits(\$)$): $$loans(\$) \leq deposits(\$)  \cdot (1 - reserve\ requirement(\%))$$
Fully loaned up means that this holds with equality: 
$$ loans(\$) =  deposits(\$)  \cdot (1 - reserve\ requirement(\%)) $$</p>

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2015-02-17T13:26:47.480Z
2015-02-17T14:06:42.233Z
2015-02-17T14:06:42.233Z
BKay
<p>Please briefly explain the situation when a bank is "fully loaned up".</p>

<banking><regulation>
What does it mean when a bank is "fully loaned up"?
stellahung
# What does it mean when a bank is "fully loaned up"?

(Asked by: username_0 on 2015-02-17)

Please briefly explain the situation when a bank is "fully loaned up".

**Tags:** banking, regulation

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## 1 answers

### Answer by username_1 on 2015-02-17. Score: 2 | Accepted answer

The reserve requirement on deposits ensures that (for a given $reserve\ requirement(\%)$ and $deposits(\$)$): $$loans(\$) \leq deposits(\$) \cdot (1 - reserve\ requirement(\%))$$
Fully loaned up means that this holds with equality:
$$ loans(\$) = deposits(\$) \cdot (1 - reserve\ requirement(\%)) $$


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