For this to be possible, banks need not only to be well staffed by people with real business experience, but need to be free from the pressures of “connected” or “command” lending pressures, which have been all-too-apparent in these countries in the past.
A depository institution holds contractual clearing balances when it needs a higher level of balances than its required reserve balances in order to pay checks or make wire transfers out of its account at the Federal Reserve without incurring overnight overdrafts.