Constant Reserve Rate (CRR)
The constant reserve rate (CRR), also known as the constant reserve ratio, represents the amount of cash that commercial banks must hold to ensure their long-term viability in the event of a bank run when customers rush to withdraw their funds. The CRR considers the total value of assets, including stocks, bonds, equities, derivatives, and other investment types held by the bank. Commercial banks in the United States undergo regular audits conducted by the Federal Reserve to verify the accuracy of their CRR and ensure full compliance with regulatory requirements.