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LEGAL RESERVES: The total amount of vault cash or Federal Reserve deposits of a bank. These are the only bank assets that can be used legally to satisfy reserve requirements.

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FEDERAL FUNDS MARKET

A financial market used by commercial banks and other depository institutions regulated by the Federal Reserve System to lend and borrow Federal funds (Federal Reserve deposits). The interest rate charged for lending through the Federal funds market is the Federal funds rate.

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Much of the $15 million used by the United States to finance the Louisiana Purchase from France was borrowed from European banks.
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