Final answer:
The statement is false. Until March 2020, the Federal Reserve had a tiered reserve requirement system, which has been reduced to 0% for all deposits to help banks during the pandemic.
Step-by-step explanation:
The statement that "The Fed has set a uniform reserve requirement of 3 percent for all deposits in the U.S. banking system" is false. Historically, the Federal Reserve implemented a tiered reserve requirement system where banks held reserves equal to 0% of the first $14.5 million in deposits, 3% of the deposits up to $103.6 million, and 10% of any deposits above $103.6 million. However, as a response to the economic impact of the pandemic in March 2020, the Fed reduced both the 10% and 3% requirements to 0%, effectively eliminating the reserve requirement for all depository institutions. This move was to ensure that banks had more flexibility to lend during the economic crisis.
Before this change, the reserve requirement thresholds were occasionally adjusted by a few million dollars, but these adjustments did not involve a change to the basic tiered structure. As such, the reserve requirements had been a tool for monetary policy but altering them significantly and suddenly can be disruptive to the banking system. It is essential for banks to have reserves to manage liquidity and meet the demand for withdrawals, but large changes are typically avoided as they can create economic instability.
In summary, large-scale changes in the reserve requirements are rare and are considered a blunt tool for executing monetary policy. It is used cautiously to avoid causing undue disruption in the financial system and the economy at large. After the onset of the pandemic, the 0% reserve requirement was instituted to allow banks greater freedom to support the economy through lending.