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Federal R eserve Bank OF DALLAS WILLIAM H. WALLACE F IR S T VICE P R E S ID E N T May 29 , 1986 dallas, texas 75222 Circular 86-56 TO: All depository institutions and others concerned in the Eleventh Federal Reserve District SUBJECT Discount rate change DETAILS The Board of Governors of the Federal Reserve System has approved action by the Board of Directors of ttie Federal Reserve Bank of Dallas establishing a new discount rate for extraordinary adjustment credit borrowings. A higher rate than the basic discount rate will be applied to loans of unusual size which result from a major operating problem at the borrower's facility, unless the problem is clearly beyond the borrower's reasonable control. The new rate will be the highest rate within the structure of discount rates at the time in question. Although the basic discount rate is now 6 1/2 percent, the highest current rate is 8 1/2 percent (for extended credit outstanding more than 150 days); consequently, the rate for extraordinary adjustment credit will be 8 1/2 percent. Printed on the reverse of this circular is a copy of Supplement A to Bulletin 2 which contains the current rate schedule in effect at this Bank. This supplement should be inserted in Volume 1 of the Regulations Binders and the supplement dated April 21, 1986 should be removed. MORE INFORMATION For more information, please contact Jesse D. Sanders or Finlay R. Higgins of this Bank's Loan Department, at (214) 651-6240. Sincerely yours, For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BULLETIN 2 FEDERAL RESERVE BANK OF DALLAS Supplement A RATES FOR DISCOUNTS AND ADVANCES The following ra te s w ith respect to discounts and advances under the Federal Reserve Act and Regulation A are now in effect a t this Bank: Rates on Discounts and Advances Per Annum Effective from Basic rate: short-term adjustm ent credit under 201.3(a) and regular seasonal credit under 201.3(b) (1) of Regulation A1..................................................................... 6V6% April 21, 1986 Tem porary seasonal credit under 201.3(b) (1) of Regulation A ......................................................................... 7% April 21, 1986 First 60 d a y s ..................................................................... 6V4% April 21, 1986 Next 90 d a y s ..................................................................... 7 V.2 % April 21, 1986 T h e re a fte r......................................................................... 8Vfc% April 21, 1986 O ther extended credit under 201.3(b) (2) of Regulation A (special circum stances credit and credit for institutions under sustained liquidity pressures)2 1 This is also the discount ra te for 90-day commercial p ap er and other p ap er eligible for discount. A ra te higher than the basic discount ra te will be applied to loans of unusual size which result from a major operating problem a t the b o rro w er’s facility, unless the problem is clearly beyond the borrow er’s reasonable control. The new ra te will be the highest ra te w ithin the structure of discount ra te s a t the time in question. 2 At the discretion of the Federal Reserve Bank of Dallas, in cases w here credit is anticipated to be outstanding for prolonged periods and in relatively large amounts, the time period for each ra te in the extended credit ra te stru ctu re may be shortened. This Bank also may apply a flexible ra te th a t takes into account ra te s on m arket sources of funds. The flexible ra te will not be lower than the basic ra te plus one percentage point. 5-29-86 A-l
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