LAGGED RESERVES
A method of bank reserve calculation that requires the financial institution to hold a certain level of reserves with the Federal Reserve bank. It must be equal to the overall deposit from two weeks in arrears.
This accounting system had been used by the Federal Reserve from 1960 to 1984 but the Fed decided to return to the lagged collection in 1998 to acquire more accurate data. This calculation is still being used today.
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Original Cost
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