In July 1998 the lagged reserve accounting (LRA) system replaced a contem- poraneous reserve accounting (CRA) system

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In July 1998 the lagged reserve accounting (LRA) system replaced a contem- poraneous reserve accounting (CRA) system as the method of reserve calcula- tion for Dls.

a. Contrast a contemporaneous reserve accounting (CRA) system with a lagged reserve accounting (LRA) system.

b. Under which accounting system, CRA or LRA, are DI reserves higher? Why?

c. Under which accounting system, CRA or LRA, is DI uncertainty higher? Why?

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Financial Institutions Management A Risk Management Approach

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Authors: Anthony Saunders, Marcia Cornett

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In July 1998 the lagged reserve accounting (LRA) system replaced a contem- poraneous reserve accounting (CRA) system

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Financial Institutions Management A Risk Management Approach

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