You have just begun a new job as a bank teller at santa's elf bank. your supervisor asks you what the difference is between reserves and excess reserves in terms of banking. you want to impress your supervisor, so you use your eidetic memory to remember what you learned in your economics course and reply: reserves refer to the cash that banks have on hand to satisfy the demands of their employees and the reserve requirements of their competitors. excess reserves refer to the amount of reserves banks have in excess of the profits they earn. excess reserves refer to the amount that the banks have beyond what they owe to their competitors. reserves are the funds banks keep on hand to meet reserve requirements established by the fed. excess reserves refer to the amount that the banks have beyond loan reserves reserves are the funds banks keep on hand to meet reserve requirements established by the fed. excess reserves refer to the reserves that the banks have beyond the legally required reserve amounts. reserves are the funds banks keep on hand to meet federal reserve requirements.