> A literal pile of cash would not count a single cent towards that requirement.
Are you sure about that? Do you have a source?
As far as I am aware, vault cash is fine, just way less convenient than an account at the Fed.
But I admit that I don't know the exact rules, and would be happy to be proven wrong.
> Modern requirements are based on core capital ratio [...]
I think you can strike the word 'modern' from that sentence. Capital cushions have been a thing for a long, long time. What's 'modern' is that the US mostly stopped having reserve requirements (though the new rules are written in such a way as to all-but force American banks to hold lots of American government debt as a sort-of reserve in disguise).
Following a link from there, I get to https://www.federalreserve.gov/monetarypolicy/reserve-mainte... and this says:
> During each reserve maintenance period an institution must satisfy its reserve requirement in the form of vault cash or, if vault cash is insufficient to satisfy the requirement, in the form of a balance maintained with a Federal Reserve Bank. The portion of the reserve requirement not satisfied by vault cash is called the reserve balance requirement.
In any case, I'm still agreeing with you!
I know. I never wanted to imply otherwise. What made you think so?
> And there is a modern capital requirement, as per Basel III, in effect since 2022. Capital historically was calculated very differently.
Yes, the rules change all the time. So there's a modern incarnation of capital requirements. But capital requirements in general aren't new.
Modern requirements are based on core capital ratio, which is basically the ratio of a pile of cash that is set aside to deal with losses of assets as a fraction of the assets (weighted by risk, so, e.g., you don't need to set aside any money to protect against a literal pile of cash but you need lots of money to protect against a shitton of shitcoins).