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FEDERAL RESERVE BANK
OF NEW YORK
•Circular No. 2 3 8 5 1
, February 27, 1942 J

REGULATION D, RESERVES OF MEMBER BANKS
Amendment Effective with Reserve Computation Period
Beginning February 28, 1942
i

To each Member Bank in the
Second Federal Reserve District:

The following statement was released for publication on February 21, 1942:
Under Regulation D of the Board of Governors of the Federal Reserve System, deficiencies in
reserve balances of member banks in cities where Federal Reserve Banks or branches thereof are
located and in a few other reserve cities are at present computed on the basis of average daily net
deposit balances covering semiweekly periods. Such computations by member banks in other reserve
cities are made on a weekly basis.

N^

The Board has amended Regulation D, effective with the reserve computation period beginning
February 28, 1942, so as to provide that member banks in all central reserve and reserve cities shall
make such computations on a weekly basis. This change places banks in all these cities, including
those in which Federal Reserve Banks or branches are located, on the same basis in this respect
and has been made for the convenience of member banks in these cities in adjusting their reserve
positions.
Country banks, i.e., those located outside of central reserve or reserve cities, will continue as
heretofore to compute deficiencies in reserve balances on a semimonthly basis.

There is set forth below the text of a resolution which has been adopted by the Board
of Governors of the Federal Reserve System amending its Regulation D:
"RESOLVED, That Regulation D, Reserves of Member Banks, is hereby amended in the following respects, effective with the reserve computation period beginning February 28, 1942:
" 1 . Subsection (a) of section 3 of Regulation D is amended to read as follows:
" ' ( a ) Computation of deficiencies.
" ' (1) Deficiencies in reserve balances of member banks in central reserve cities and in reserve
cities shall be computed on the basis of average daily net deposit balances covering weekly periods.
Deficiencies in reserve balances of other member banks shall be computed on the basis of average daily net deposit balances covering semimonthly periods.8
" ' (2) In computing such deficiencies the required reserve balance of each member bank at
the close of business each day shall be based upon its net deposit balances at the opening of business on the same day; and the weekly and semimonthly periods referred to in paragraph (1)
hereof shall end at the close of business on days to be fixed by the Federal Reserve banks with
the approval of the Board of Governors of the Federal Reserve System.'
•
Deficiencies in reserve balances of member banks in outlying sections o£ central reserve and reserve cities which have been authorized
by the Board of Governors of the Federal Reserve System, under the provisions of subsection (a) of section 2 of this regulation, to maintain
seven per cent reserves against demand deposits, will also be computed on the basis of average daily net deposit balances covering semimonthly periods.'
(OVER)




'' 2. Section 4 of Regulation D is amended to read as follows:
" 'SECTION 4.

LOANS AND DIVIDENDS WHILE RESERVES ARE DEFICIENT

'* ' I t is unlawful for any member bank the reserves of which are deficient to make any new
loans or pay any dividends unless and until the total reserves required by law are fully restored,
and the payment of penalties for deficiencies in reserves does not exempt member banks from
this prohibition of law. As provided in section 3 of this regulation, penalties for deficiencies in
reserves are computed on the basis of the average reserve balances for weekly or semimonthly
periods; but this prohibition of law applies whenever the reserves are deficient for one day or
more, regardless of whether or not the average reserve balances for the weekly or semimonthly
period are deficient.' "

Deficiencies in reserve balances of member banks in the Boroughs of Manhattan, Brooklyn
and The Bronx in New York City and in Buffalo, N. Y., are at present computed on a semiweekly basis. In accordance with the above amendment to Regulation D, deficiencies in reserve
balances of such member banks shall be computed on the basis of average daily net deposit
balances covering weekly periods. Report Form R.B.20 for reporting required reserves on a
weekly basis for each week beginning on Saturday and ending on Friday will, accordingly, be
sent promptly to such member banks.
Deficiencies in reserve balances of other member banks shall be computed on the basis of
average daily net deposit balances covering semimonthly periods and member banks in the
Second Federal Reserve District, other than member banks in the Boroughs of Manhattan,
Brooklyn and The Bronx in New York City and in Buffalo, N. Y., will continue to report their
required reserves as heretofore on Form R.B. 13 as of the fifteenth and last day of each month.
It will be noted that the above amendment to Regulation D will become effective with the
reserve computation period beginning February 28, 1942.




ALLAN SPEOUL,

President.

JRM R. B. 2O

REPORT OF NET DEMAND AND TIME DEPOSITS
FOR WEEK ENDING FRIDAY

194

TO ACCOUNTING DEPARTMENT
FEDERAL RESERVE BANK OF NEW YORK
The amounts of net demand deposits and time deposits reported for each business day are to be based on the deposit balances shown by the books of the member
bank ac the opening of business the same day. The amounts reported for a Sunday or a holiday are to be based on the deposit balances at ihe close of the preceding
msiafiss day. The amounts so reported for a Sunday or a holiday should be repeated for the following business day.
(1)
GROSS DEMAND
DEPOSITS
thousands hundreds
millions

DAY

(2)
BALANCES SUBJECT TO
IMMEDIATE W I T H D R A W A L
DUE PROM OTHER BANKS
millions
thousands hundreds

(3)
CASH ITEMS IN PROCESS
OF COLLECTION
millions
thousands hundreds

NET DEMAND DEPOSITS
COLUMN ( 1 ) MINUS
COLUMNS ( 2 A N D 3 )
millions

TIME

thousands hundreds

millions

DEPOSITS
thousands hundreds

SAT.

SUN.

ION.

TUES.

WED.

THURS.

FR1.
—
TOTAL
ss demand deposits are less than the

deduttio ns. net
.

demana deposits on that date should be shown as zt

AVIERASE

RESER •ro.)
2O% OR 2.G<?o OF
T

6%

OF

TOTAL,

f

/E REQUIRED
(AVERAGE NET DEMAND DEPOSITS)

f
f

( A V E R A G E T I M S D EPOS ITS)

[ A V E R A G E RESERVE R E Q U I R E D TO
•JBE O N D E P O S I T W I T H T H E FE DERAL
(.RESERVE B A N K O F N E W YORK

S

i HEREBY C E R T I F Y T H A T THE ABOVE STATEr flENT IS CORRECT r A N D I N ACCORD *NCE W I T H THE BOOKS OF T H I S BANK AN D T H A T
T H E FIGURES SHC W N ABOVE UNDER N E T 3EMAND DEPOSH S A N D T I M E DEF OSITS RESPECTIVELY HAVE BEEN COMPL TED I N
ACCORDANCE W I T I - T H E FORM PRESCRIBED B Y T H E BOARD OF GOVERNORS OF T HE FEDERAL RESERVE SYSTEM FOR T H A T PURPOSE

THIB REPORT
TO BE FILED

OFFICIAL SIGNATURE

TITLE

NOT LATER THAN
MONDAY OF THE

NAME OF BANK

FOLLOWING WEEK


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I . B. 2O.9- SM-2-42
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