Lots of countries have no reserve requirement. It actually doesn’t change much, just the asset mix banks hold.
How much a bank can lend is basically entirely determined by the amount of paid-up capital, not reserves anyway. The maximum ratios are fairly strictly regulated (e.g. Basel rules).
So, I'd been interpreting this change as meaning that they're no longer required to carry some minimum amount of cash.
I would be more confident in banks if they were required to carry some minimum fraction of their balances in cash in order to guarantee availability of funds.
That said, I'm re-reading the page that I linked a bit more closely and realizing that it doesn't just say "reserve requirements must be satisfied by holding vault cash" , it says "reserve requirements must be satisfied by holding vault cash and, if vault cash is insufficient, by maintaining a balance in an account at a Federal Reserve Bank".
It's not clear to me whether that "balance" at a Fed bank must be in cash, but even if it is, I'm realizing that the requirement I was hoping existed may not have existed even prior to this change.
TL;DR - Requirement for strong, local, cash reserves would be better than weaker requirements is better than no requirements. I'm not sure how close to the good end of that spectrum we've ever been, but where we are now certainly doesn't seem too good.
Note: Please do explain if there is some nuance that I'm missing here
The reserve requirement served no purpose because banks were holding trillions of dollars in excess of their reserve requirements meaning that the reserve ratio was an ineffective monetary policy tool.
It's a combination of capital paid from shareholders holding fully paid shares (i.e. shares that were paid in full when issued - for example, when shareholders buy new shares in capital raising rounds) and retained earnings.
How much a bank can lend is basically entirely determined by the amount of paid-up capital, not reserves anyway. The maximum ratios are fairly strictly regulated (e.g. Basel rules).