Why do banks have to keep a minimum amount of cash or liquid assets?

Question

who makes the banks do this, and what is the point of doing so? thanks!

Answer 1

well...the chemical functuality is simply put in a standard diversity capsule which is exaimed in the UBU..(united bank union)   hope this helps!!!!

Answer 2

Reserves are required by bank examiners when their loans look shaky.

This is intended to make the banks careful about weak loans, and to prevent the banks from loaning those funds, which cannot earn interest income.

It makes them more solvent if/when loans default.

Certainly they need some cash on hand to cover withdrawls.  That isn't much of a problem unless a run on the bank occurs.  In that case a bank can close if funds run short although they have outside sources for funds.