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F ederal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular No. 83-150
December 22, 1983
REGULATION D
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS
(Amendments)
TO ALL DEPOSITORY INSTITUTIONS IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors of the Federal Reserve System has announced
amendments to Regulation D increasing from $26.3 million to $28.9 million the
amount of net transaction accounts subject to the lowest reserve requirement
in 1984. The Board also increased from $2.1 million to $2.2 million the
amount
of
reservable
liabilities subject to a zero percent reserve
requirement. These changes will be effective with the reserve computation
period beginning on December 29, 1983, for weekly reporting institutions and
on December 15, 1983, for quarterly reporting institutions. The corresponding
reserve maintenance period will begin on January 12, 1984.
Attached is the text of the Board's press release and the related
Federal
Register document. Questions should be directed to Robert Feil, (214)
651-6690 at the Head Office; Javier Jimenez, (915) 544-4730 at the El Paso
Branch; Rodney Franklin, (713) 659-4433 at the Houston Branch; or Pete
Castleberry, (512) 224-2141 at the San Antonio Branch.
Additional copies of this circular will be furnished upon request to
the Public Affairs Department, Extension 6289.
Sincerely yours,
First Vice President
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
Banks and others are encouraged to use the follow ing in com ing WATS numbers in con tacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.
FEDERAL RESERVE press release
**
For immediate release
Rfc^t * *
December 1, 1983
The Federal Reserve Board today announced an increase in the amount of
net transaction accounts to which the lowest -- 3 percent —
will apply in 1984 from $26.3 million to $28.9 million.
reserve requirement
The Board also increased
the amount of reservable liabilities in depository institutions that are subject
to a zero percentage reserve requirement from $2.1 million to $2.2 million.
The Board made the changes in accordance with provisions of the Monetary
Control Act of 1980 and the Garn-St Germain Depository Institutions Act of 1982.
The Monetary Control Act requires the Board to amend its Regulation D
(Reserve Requirements of Depository Institutions) annually to increase the amount
of transaction accounts subject to a 3 percent reserve requirement in the next
calendar year to 81) percent of the annual percentage increase in transaction
accounts held by all depository institutions.
The growth in total net trans
action accounts of all depository institutions from June 30, 1982 to June 30,
1983 was 12.5 percent.
The statutory rule thus requires an increase of 10 percent
or to $28.9 million.
The Garn-St Germain Act requires the Board to amend Regulation D to
adjust the amount exempt from reserve requirements for the upcoming year by 80
percent of the annual percentage increase in total reservable liabilities.
Growth in total reservable liabilities was 5.1 percent from June 30, 1982 to
June 30, 1983, requiring an increase in the reserve requirement exemption to
$2.2 million.
The adjustments take effect for all depository institutions with the
reserve maintenance period beginning January 12, 1984.
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Attachment
0-
FEDERAL RESERVE SYSTEM
Regulation D
[12 CFR Part 204]
[Docket No. R - 0 4 9 2 ]
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS
Reserve Requirement Ratios
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Final rule.
SUMMARY:
The
Board
is
amending
12
CFR
Part
204
(Regulation D — Reserve Requirements of Depository Institutions)
to adjust (1) the amount of transaction accounts subject to a
reserve requirement ratio of three percent, as required by the
Monetary Control Act of 1980 (Title I of Pub. L. 96-221;
12 U.S.C. § 461(b)(2)(C)) and (2) the amount of reservable
liabilities of each depository institution that is subject to a
reserve requirement of zero percent, as required by the Garn-St
Germain Depository Institutions Act of 1982 (Pub. L. 97-320;
12 U.S.C.
§ 4 6 1 (b)(11)(B)).
Under
the amendment,
each
depository institution, Edge or agreement corporation, and U.S.
branch or agency of a foreign bank will be subject to a three
percent reserve ratio on the first $28.9 million of its net
transaction accounts and to a 12 percent reserve ratio on
amounts in excess of $28.9 million, and to a zero percent
reserve requirement on $2.2 million of reservable liabilities.
Currently,
the
first
$26.3
million
of
a depository
institution's net transaction accounts are subject to a three
percent
reserve
ratio
and
$2.1 million
of
reservable
liabilities are exempt from reserve requirements.
EFFECTIVE DATEi
January 12, 1984.
This is the beginning of
the first reserve maintenance period to which the amendment
applies.
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2-
FOR FURTHER INFORMATION CONTACT:
Gilbert T. Schwartz,
Associate General Counsel (202/452-3625) or Paul S. Pilecki,
Senior Counsel
(202/452-3281), Legal Division, Board of
Governors of the Federal Reserve System, Washington, D.C.
20551.
SUPPLEMENTARY INFORMATION:
The Monetary Control Act of 1980
("MCA") requires each depository institution to maintain with
the Federal Reserve System reserves against its transaction
accounts and nonpersonal time deposits, as prescribed by Board
regulations.
The initial reserve requirements imposed under
the MCA were set at 3 percent for each depository institution's
transaction accounts of $25 million or less and at 12 percent
on transaction accounts above $25 million, which the Board is
authorized to vary between 8 and 14 percent.
The MCA further
provides that the Board shall issue a regulation before
December 31 of each year, adjusting for the next calendar year
the total dollar amount of the transaction account tranche
against which reserves must be maintained at a ratio of 3
percent.
The increase in the tranche is to be 80 percent of
the percentage increase in total transaction accounts for all
depository institutions determined as of June 30 of each year.
At present, the amount of the low reserve tranche on
transaction accounts is $26.3 million.
The growth in the total
net transaction accounts of all depository institutions from
June 30, 1982, to June 30, 1983, was 12.5 percent.
In
accordance with these provisions of the MCA, the Board is
amending Regulation D to increase the amount of the low reserve
tranche for transaction accounts for 1983 to $28.9 million.
Section 411 of the Garn-St Germain Act, which was
enacted on October 15, 1982, provides that $2 million of
reservable liabilities^./ of each depository institution shall
be subject to a zero percent reserve requirement.
The Garn-St
Germain Act permits each depository institution, in accordance
with the rules and regulations of the Board, to designate the
reservable liabilities to which this reserve requirement
exemption is to apply.
However, if transaction accounts are
designated, only those that would otherwise be subject to a
three percent reserve requirement (.i •£., transaction accounts
within the low reserve requirement tranche) may be so
A/
The Garn-St Germain Act defines reservable liabilities as
transaction
accounts,
nonpersonal
time
deposits,
and
Eurocurrency liabilities as defined in section 19(b)(5) of the
Federal Reserve Act.
-
3-
designated.
As a result, the effect of this amendment is to
modify the low reserve tranche (which is $28.9 million,
effective December 30, 1983) to apply a zero percent reserve
requirement on the first $2 million of transaction accounts and
a 3 percent reserve requirement on the remainder of the low
reserve tranche, or to provide a zero percent reserve
requirement
tranche on nonpersonal
time deposits with
maturities
of less
than
1-1/2 years or Eurocurrency
liabilities, both of which are subject to a reserve requirement
ratio of three percent.
The Garn-St Germain Act also provides that the Board
shall issue a regulation before December 31 of each year,
adjusting for the next calendar year the dollar amount of
reservable liabilities exempt from reserve requirements.
The
change in the amount is to be made only if the total reservable
liabilities held at all depository institutions increases from
one year to the next.
The percentage increase in the tranche
is to be 80 percent of the percentage increase in total
reservable
liabilities
of
all
depository
institutions
determined as of June 30 each year.
The growth in total
reservable liabilities of all depository institutions from
June 30, 1982, to June 30, 1983, was 5.1 percent.
In
accordance with this provision of the Garn-St Germain Act, the
Board is also amending Regulation D to increase the amount of
the reserve requirement exemption to $2.2 million.
Reserve requirements will be reduced for the reserve
maintenance week that begins on January 12, 1984, for all
depository institutions.
These amendments will be effective
for the reserve computation period that begins on December 29,
1983, for a weekly reporter and December 15, 1983, for a
depository institution that reports deposits and maintains
reserves on a quarterly basis.
In addition, all entities
currently submitting Form FR 2900 will continue to submit
reports to the Federal Reserve under current reporting
procedures.
The provisions of 5 U.S.C. § 553(b) relating to notice
and public participation have not been followed in connection
with the adoption of these amendments because the amendments
involve adjustments prescribed by statute.
Thus, the Board
believes that notice and public participation is unnecessary
and contrary to the public interest.
List of Subjects in 12 CFR Part 204
Banks, banking; Currency; Federal
Penalties and Reporting requirements.
Reserve
System;
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4-
Effective January 12, 1984, pursuant to the Board's
authority under section 19 of the Federal Reserve Act,
12 U.S.C. § 461 et_ s e q ., 12 CFR Part 204 is amended by revising
paragraph (a) of section 204.9 to read as follows:
SECTION 204.9 —
RESERVE REQUIREMENT RATIOS
(a)(1)
Reserve percentages.
The following reserve
ratios are prescribed for all depository institutions, Edge and
Agreement Corporations, and United States branches and agencies
of foreign banks:
Category
Reserve requirement
Net transaction accounts
$0 - $28.9 million
3% of amount
over $28.9 million
$867,000 plus 12% of
amount over $28.9
million
Nonpersonal time deposits
By original maturity
(or notice period):
Less than 1-1/2 years
1-1/2 years or more
Eurocurrency liabilities
3%
0%
3%
Each
(2 )
Exemption______
from reserve requirements.
depository institution, Edge or Agreement corporation, and U.S.
branch or agency of a foreign bank is subject to a zero percent
reserve requirement on an amount of its transaction accounts
subject to the low reserve tranche in paragraph (a)(1),
nonpersonal time deposits, or Eurocurrency liabilities or any
combination thereof not in excess of $2.2 million determined in
accordance with section 204.3(a)(3) of this Part.
By order of the Board of Governors, November 30, 1983.
(signed) William W. Wiles
William W. Wiles
Secretary of the Board
@FedFRASER