<P> A depository institution can satisfy its reserve requirements by holding either vault cash or reserve deposits . An institution that is a member of the Federal Reserve System must hold its reserve deposits at a Federal Reserve Bank . Nonmember institutions can elect to hold their reserve deposits at a member institution on a pass - through basis . </P> <P> A depository institution's reserve requirements vary by the dollar amount of NTAs held by customers of that institution . Effective November 17, 2015, institutions with net transactions accounts: </P> <Ul> <Li> Of less than $15.2 million have no minimum reserve requirement; </Li> <Li> Between $15.2 million and $110.2 million must have a liquidity ratio of 3% of NTAs; </Li> <Li> Exceeding $110.2 million must have a liquidity ratio of 10% of NTAs . </Li> </Ul> <Li> Of less than $15.2 million have no minimum reserve requirement; </Li>

When does an increase in the required reserve ratio not cause the money supply to fall