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A commercial bank’s reserves are the money supply it has. This supply is made up of checking deposits and bookkeeping entries that are held in the bank. So, a commercial bank’s reserves can be made of deposits, time deposits, money from market funds as well as variety of other assets that can be converted easily into currency on a short notice.
A commercial bank’s reserves are not constant. The amount of money held in any bank changes from time to time. The US Federal Reserve also has control over the money supply that each commercial bank holds. The Federal Reserve specifies what reserves deposit taking banks must set aside either as currency in their vaults or as deposits in the regional Reserve Bank. This means that commercial banks are forced to withhold large parts of the funds and this results in reduction of money supply.
It has been seen that banks often lend money to each other overnight just to be able to maintain the reserve requirement stipulated by the Federal Bank. The rate of such loans is a key gauge in judging how tight or loose the monetary policy is at a given time.
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Many analysts and university students have done case studies about the functions of a commercial bank. In fact, many finance oriented universities stipulate these case studies so that students have better understanding of the working of a bank. 
