Big bank, small bank: Monetary policy implementation and banks' reserve management strategies

► This paper provides estimates of banks' demand for reserve balances on a period average basis for the period from 2005 to mid-2008. ► Consistent with theoretical work, we find that the demand for excess depends critically on uncertainty of flows in and out of reserve accounts. ► We document the variability of demand for excess reserve balances by institution size. ► We evaluate different models for forecasting demand for excess on a period average basis. ► We report the forecasting performance of each of these models.