BROWSE

Lagged Reserves

What is 'Lagged Reserves'

A method of bank reserve calculation whereby the financial institution is required to keep a certain level of reserves with a Federal Reserve bank. The amount of reserves required is based on the value of all outstanding deposits in the bank's demand deposit accounts from two weeks prior.

Explaining 'Lagged Reserves'

Lagged reserve calculation was used from the late 1960s until 1984, when contemporaneous calculations were implemented. But the Fed decided to revert back to the lagged calculation in 1998 in order to obtain more accurate data. This type of reserve calculation is still being used today.


Further Reading


Demand for international reserves in less developed countries: a distributed lag specification
www.jstor.org [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Interpreting the significance of the lagged interest rate in estimated monetary policy rulesInterpreting the significance of the lagged interest rate in estimated monetary policy rules
www.degruyter.com [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

The use of reserve requirements as a policy instrument in Latin AmericaThe use of reserve requirements as a policy instrument in Latin America
papers.ssrn.com [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Money announcements, the demand for bank reserves and the behavior of the federal funds rate within the statement weekMoney announcements, the demand for bank reserves and the behavior of the federal funds rate within the statement week
www.nber.org [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Lagged reserve accounting and the money supply mechanismLagged reserve accounting and the money supply mechanism
www.jstor.org [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Official financial flows, capital mobility, and global imbalancesOfficial financial flows, capital mobility, and global imbalances
www.sciencedirect.com [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Real exchange rate and international reserves in an era of growing financial and trade integrationReal exchange rate and international reserves in an era of growing financial and trade integration
www.mitpressjournals.org [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Sterilization, monetary policy, and global financial integrationSterilization, monetary policy, and global financial integration
onlinelibrary.wiley.com [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …

Money supply control and lagged reserve accountingMoney supply control and lagged reserve accounting
www.jstor.org [PDF]
… an instability-of-ex- port-receipts index, the degree of openness, the return on reserves, and two lagged values of … Kenen, PB, and EB Yudin, "The Demand for International Reserves," this REVIEW 47 (Aug … Nerlove, M., "Lags in Economic Behavior," Econo- metrica 40 (Mar …



Q&A About Lagged Reserves


Who are the authors of this article?

The authors are Board of Governors of the Federal Reserve System.

Where can you find this article?

You can find this article on the Federal Reserve website at https://www.federalreserve.gov/monetarypolicy/reservereq.htm .

Why did they decide to implement contemporaneous calculations instead of lagged calculations?

The Fed decided that it would be better for them if they could get their hands on more accurate data by using contemporaneous calculations rather than lagging ones.

What is lagged reserves?

Lagged reserves are a method of bank reserve calculation whereby the financial institution is required to keep a certain level of reserves with a Federal Reserve bank. The amount of reserves required is based on the value of all outstanding deposits in the bank's demand deposit accounts from two weeks prior.

When was lagged reserve calculation first implemented?

Lagged reserve calculation was used from the late 1960s until 1984, when contemporaneous calculations were implemented. But the Fed decided to revert back to the lagged calculation in 1998 in order to obtain more accurate data. This type of reserve calculation is still being used today.

What kind of information can you gain from this type of reserve system?

You can learn about how much money banks have and how much money they lend out over time through this type of system.