[seanhunter]

UK and US banks absolutely do have reserve requirements and they are neither 1% nor 0%. I have no idea where you're getting that from. The reserve requirements vary by type of bank and type and risk weighting of asset.

Here is the documentation that explains the capital requirements for a regulated entity (not just banks, but including banks) in the UK

https://www.handbook.fca.org.uk/handbook/glossary/G1567.html

[andrepd]

Capital requirements, not reserve requirements.

[seanhunter]

Reserve requirements are capital requirements. "reserve" here is capital that you reserve to withstand losses in particular classes of assets.

There are also requirements for particular proportions of the capital base to be held in liquid assets (cash and near cash) in order to pay back deposits etc.

//edited to make the point about liquidity