composite currency  an artificial unit of account that is an average of the values of several national currencies
credit  available savings that are lent to borrowers to spend
currency substitution  the use of foreign money as a substitute for domestic money when the domestic money has a high rate of inflation
deposit expansion multiplier  the reciprocal of the reserve requirement
Eurocurrency market  the market for deposits and loans generally denominated in a currency other than the currency of the country in which the transaction occurs; also called offshore banking
European Currency Unit (ECU)  a unit of account used by western European nations as their official reserve asset
excess reserves  the cash reserves beyond those required, which can be loaned
Federal Deposit Insurance Corporation (FDIC)  a federal agency that insures deposits in commercial banks
fractional reserve banking system  a system in which banks keep less than 100 percent of the deposits available for withdrawal
international banking facility (IBF)  a division of a U.S. bank that is allowed to receive deposits from and make loans to nonresidents of the United States without the restrictions that apply to domestic U.S. banks
international reserve asset  an asset used to settle debts between governments
international reserve currency  a currency held by a government to settle international debts
liquid asset  an asset that can easily be exchanged for goods and services
M1 money supply  the financial assets that are most liquid
money  anything that is generally acceptable to sellers in exchange for goods and services
money supply  the financial assets that are immediately available for spending
required reserves  the cash reserves (a percentage of deposits) a bank must keep on hand or on deposit with the Federal Reserve
special drawing right(SDR)  an artificial unit of account created by averaging the values of the U.S. dollar, euro, Japanese yen, and British pound
transactions account  a checking account at a bank or other financial institution that can be drawn on to make payments