The bank's excess reserves are 20 if the reserve requirement is 10%.
The amount of money that a bank must have in reserve in order to pay its obligations in the event of unforeseen withdrawals is known as the reserve requirement.
Capital reserves stored in excess of what is required by regulators, creditors, or internal controls are known as excess reserves by a bank or financial institution. The standard reserve requirement amounts established by central banking regulators are contrasted with excess reserves held by commercial banks.
Required reserves ($ million) = Demand deposit × Reserve ratio
= 800 × 10% = 80
Excess reserves ($ million) = Total reserves - Required reserves
= 100 - 80 = 20
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