Full text of Federal Reserve Bank of New York Circulars : 7544. Interpretation of Regulation D

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FED ER AL RESERVE BANK
O F NEW YORK

I- Circular No. 7 5 4 4 "I
L January 6, 1975 J

INTERPRETATION OF REGULATION D
Treatment of Gold by Federal Reserve Banks

T o A ll M e m b er B a n ks, and O th ers Concerned,
in the Second F ederal R eserve D istric t:

In response to numerous inquiries received from member banks, the Board
of Governors of the Federal Reserve System has issued an interpretation of
Regulation D consisting of questions and answ ers relating to the repeal of the ban
on ownership of gold by U nited States citizens.
Enclosed is a copy of that interpretation. Additional copies will be furnished
upon request.




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Board of Governors of the Federal Reserve System
RESERVES OF MEMBER BANKS
IN T E R P R E T A T IO N O F R E G U L A T IO N D
Questions and Answers Regarding the Treatment of Gold by Federal Reserve Banks
§250.260 — Miscellaneous Interpretations Gold Coin and Bullion
The Board has received numerous inquiries
from member banks relating to the repeal of
the ban on ownership of gold by United States
citizens. Listed below are questions and answers
which affect member banks and relate to the
responsibilities of the Federal Reserve System.
(1)
May gold in the form of coins or bul­
lion be counted as vault cash in order to
satisfy reserve requirements? No. Section
19(c) of the Federal Reserve Act requires that
reserve balances be satisfied either by a balance
maintained at the Federal Reserve Bank or by
vault cash, consisting of United States currency




and coin. Gold in bullion form is not United
States currency. Since the bullion value of
United States gold coins far exceeds their face
value, member banks would not in practice dis­
tribute them over the counter at face value to
satisfy customer demands.
(2) Will the Federal Reserve Banks per­
form services for member banks with respect
to gold, such as safekeeping or assaying? No.
(3) Will a Federal Reserve Bank accept
gold as collateral for an advance to a member
bank under §10(b) of the Federal Reserve
Act? No.
By order of the Board of Governors, effec­
tive December 17, 1974.

PR IN T E D IN N EW YORK