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LEGAL RESERVES: The total amount of vault cash or Federal Reserve deposits of a bank. These are the only bank assets that can be used legally to satisfy reserve requirements.

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LEGAL RESERVES

The combination of vault cash and Federal Reserve deposits that banks can legally use to satisfy government reserve requirements. Legal reserves, which can also be considered total reserves, are divided between require reserves and excess reserves. Required reserves are used to back up deposits and process daily transactions, while excess reserves are then available for interest-paying loans.

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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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