Final answer:
When the instrument does not provide instructions regarding reserves for depreciation or depletion, the trustee has the discretion to make decisions. Reserve requirements set by the Federal Reserve ensure financial stability and influence bank behavior.
Step-by-step explanation:
If the governing instrument is silent with respect to reserves for depreciation or depletion, the trustee may exercise discretion. This situation reflects the trustee's capacity to make decisions in the absence of explicit instructions within the governing document.
Reserve requirements are the minimum amount of funds that a depository institution must hold against deposit liabilities. The Federal Reserve has the authority to determine these requirements, which are intended as a measure to ensure financial stability and influence bank behavior.