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F eder al R eserve Ba n k o f D allas DALLAS, TEXAS 75222 C i r c u l a r No. 75-16 J a n u a r y 22, 1975 DECREASE IN RESERVE REQUIREMENTS ON NET DEMAND DEPOSITS TO ALL MEMBER BANKS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: T h e r e is quote d below the te x t of a p r e s s re le a s e is su e d On J a n u a r y 20, 1974, b y th e Board of G o v e rn o rs of the Federal R e s e r v e System a n n o u n c i n g a re d u c tio n in r e s e r v e r e q u i r e m e n t s on d em an d d e p o s it s of mem b e r b a n k s . T h e am endm ents a r e effective on demand d e p o sits in the week b e g i n n i n g J a n u a r y 30, 1975, a n d affect r e s e r v e s held b y member b a n k s in the w eek b e g i n n i n g F e b r u a r y 13, 1975. T h e Board of G o v e rn o rs of the Federal R e s e r v e System a n n o u nced today a re d u c tio n in r e s e r v e r e q u i r e m e n t s on the ne t d em and d e p o s it s of mem ber commercial b a n k s . T h e action will re le a s e ab o u t $1.1 billion in r e s e r v e s to the b a n k i n g s y s te m . T h e action is d e s ig n e d to p e rm it f u r t h e r g r a d u a l im p ro v e ment in b a n k liqu id ity a n d to facilitate m o d erate g ro w th in the monetary a g g r e g a t e s . R e s e r v e r e q u i r e m e n t s will be re d u c e d by 1 /2 - o f - 1 - p e r c e n t a g e poin t on all c a t e g o ri e s of net demand d e p o s it s u p to $400 million. T h e re d u c tio n on d e p o sits of m ore th an $400 million will be 1 p e r c e n t a g e point. T h e new s c h e d u le of r e s e r v e s is as follows: Net Demand Deposits (In Millions of Dollars) 0 2 10 100 Over 2 -1 0 - 100 - 400 400 Present Ratio 8 10 12 13 17 1/2 1/2 1/2 1/2 New Ratio 7 1/2 10 12 13 16 1/2 This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - T h e new r e s e r v e ratio s will a p p l y to net d em and d ep o sits d u r i n g th e w eek of J a n u a r y 3 0 - F e b r u a r y 5. T h e y will affect the r e s e r v e s b a n k s m u st maintain d u r i n g the week of F e b r u a r y 13-19. No c h a n g e was made by the Board in r e s e r v e r e q u i r e m e n t s on time a n d s a v i n g s d e p o s it s . A r e v i s e d S up p le m e nt to Regulation D (R e se rv e s of Member B a n k s ) , effective J a n u a r y 30, 1975, is e n c l o s e d . T h is S u p ple m e n t sh ou ld be i n s e r t e d in y o u r b i n d e r of Bulletins a n d R egulations is s u e d by th is Bank on the effec tive d a te , a n d th e Su p p le m e n t w h ic h is c u r r e n t l y in u s e , d a te d November 28, 1974, sh o uld be re m oved a t th a t time a n d d e s t r o y e d . S in c e re ly y o u r s , T . W. Plant F i r s t Vice P r e s i d e n t E n c lo s u re BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM RESERVES OF MEMBER BANKS SUPPLEMENT TO REGULATION D A s am ended effective January 3 0 ,1 9 7 5 SECTION 204.5—RESERVE REQUIREMENTS (a) Reserve percentages. Pursuant to the provi sions o f section 19 of the Federal Reserve A ct and § 204.2(a) and subject to paragraph (c) of this section, the Board of G overnors of the F ed eral Reserve System hereby prescribes the follow ing reserve balances th at each m em ber bank of the Federal Reserve System is required to m ain tain on deposits with the Federal Reserve Bank of its district: (1 ) If n o t in a reserve city— are in excess of $10 million but less than $100 million, or (d ) $11,750,000 plus 13 p er cent of its net dem and deposits in excess of $100 million. (2 ) If in a reserve city (except as to any bank located in such a city th at is perm itted by the B oard of G overnors of the Federal Reserve System, pursuan t to § 2 0 4 .2 ( a ) ( 2 ) , to m aintain the reserves specified in subpara graph (1 ) of this p a ra g ra p h )— (i) 3 per cent o f (A) its savings deposits and (B) its time deposits, open account, that constitute deposits of individuals, such as Christm as club accounts and vacation club accounts, th a t are m ade under written con tracts providing th a t no withdrawal shall be m ade until a certain num ber of periodic de posits have been m ade during a period of n ot less than 3 months; and (i) 3 per cent of (A) its savings deposits and (B) its time deposits, open account, that constitute deposits of individuals, such as Christmas club accounts and vacation club accounts, th at are m ade u nd er written con tracts providing th at no withdrawal shall be m ade until a certain num ber of periodic deposits have been m ade during a period of n o t less than 3 months; and (ii) 3 per cent of its tim e deposits out standing on N ovem ber 28, 1974, which have an initial m aturity of 180 days or more, or are issued on or after N ovem ber 28, 1974 with an initial m aturity of 180 days or more, 3 per cent of its time deposits up to $5 mil lion, outstanding on N ovem ber 28, 1974, which have an initial m aturity of less than 180 days, o r are issued on or after N ovem ber 28, 1974 with an initial m aturity of less than 180 days, plus 6 per cent of such de posits in excess of $5 million;* and (ii) 3 per cent o f its time deposits out standing on N ovem ber 28, 1974, which have an initial m aturity of 180 days or more, or are issued on o r after N ovem ber 28, 1974 with an initial m aturity of 180 days o r more, 3 per cent of its tim e deposits up to $5 mil lion, outstanding on N ovem ber 28, 1974, which have an initial m aturity of less than 180 days, or are issued on or after N ovem ber 28, 1974 with an initial m aturity of less than 180 days, plus 6 per cent of such de posits in excess of $5 million;* and (iii) (a) 7 Vi per cent of its net demand deposits if its aggregate net dem and deposits are $2 million o r less, ( b ) $150,000 plus 10 p er cent of its net dem and deposits in excess of $2 million if its aggregate net dem and de posits are in excess of $2 million b u t less than $10 million, (c) $950,000 plus 12 p er cent of its net dem and deposits in excess o f $10 million if its aggregate net dem and deposits (iii) $50,750,000 plus I 6 V2 per cent of its n et dem and deposits in excess of $400 million. (b) Currency and coin. T he am ount of a m em ber b ank’s currency and coin shall be counted as reserves in determining compliance with the re serve requirem ents of paragraph (a) of this sec tion. * Time deposits issued in the period November 14, 1974 to November 18, 1974, with maturities of between 120 and 179 days, may be treated as if they had initial maturities of 180 days or more. (c) Reserve percentages against certain de posits by foreign banking offices. Deposits repre sented by promissory notes, acknowledgments of advances, due bills, or similar obligations described in § 204.1(f) to foreign offices of other banks,8 or to institutions the time deposits of w hich are exempt from the rate limitations of Regulation Q pursuant to § 217.3(g) thereof, shall not be sub ject to paragraph (a) of this section or to § 204.3 (a)(1) and (2); but during each week of the four-week period beginning June 21, 1973, and during each successive four-w eek ( “m aintenance” ) period, a mem ber b ank shall m aintain with the Reserve Bank of its district a daily average bal ance equal to 8 per cent of the daily average am ount of such deposits during the four-week com putation period ending on th e W ednesday 15 days before the beginning of the m aintenance period. A n excess or deficiency in reserves in any week of a m aintenance period under this p ara graph shall be subject to § 204.3(a)(3), as if com puted under § 204.3(a)(2), and deficiencies under this paragraph shall be subject to § 204.3(b).9 8Any banking office located outside the States of the United States and the District of Columbia of a bank organized under domestic or foreign law. 9The term “computation period” in § 204.3(a)(3) and (b) shall, for this purpose, be deemed to refer to each week of a maintenance period under this paragraph.
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