Contemporaneous Reserves
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Definition of 'Contemporaneous Reserves'A method of determining the amount of bank reserves that is based on currently outstanding balances. Contemporaneous reserves are calculated to see how much a bank must keep on hand for the cash in its vault and its deposit accounts. Banks were required to calculate contemporaneous reserves each Monday and report them on Wednesday of the same week. |
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Investopedia explains 'Contemporaneous Reserves'The contemporaneous reserve calculation was used from 1984 to 1998. Previously, banks were required to use the lagged reserve calculation going back to the late sixties. But the Fed went back to using the lagged calculation in 1998 in order to obtain a more accurate financial data. |
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