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F ederal reserve bank DALLAS, TEXAS of Dallas 75222 Circular No. 70-^9 February 25, 1970 REGULATIONS D AND Q Bank-Related Commercial Paper To All Member Banks in the Eleventh Federal Reserve District: Quoted below is a press release issued by the Board of Governors of the Federal Reserve System on February 2 k , 1970, concerning the Board's decision to defer action on proposals regarding the application of Regula tions D and Q, to funds raised by banks through issuance of commercial paper by their affiliates or subsidiaries. "The Board of Governors of the Federal Reserve System announced today that it was deferring action on outstanding proposals to apply interest rate ceilings, reserve requirements, or both, to funds obtained by banks through issuance of com mercial paper by their affiliates. These proposals were first published for public comment on October 29, 1969* January 20, 1970. After reviewing both the comments received and the current business and financial situation, the Board decided to defer action on these proposals at this time in order to avoid additional strin gency in money and credit conditions. "In keeping with this decision, the Board also agreed to extend (l) the suspension on the limitations on the rate of interest that may be specified in commercial paper with a maturity of 30 days or more issued by a subsidiary of a member bank, to the extent that the total amount of such obligations does not exceed the total amount of the subsidiary’s commercial paper outstanding on October 29, and (2) the permission granted Reserve banks to waive penalties in connection with the applica tion of reserve requirements to such obligations. The applica bility of such regulations to bank subsidiaries was specifically affirmed by the Board on October 29, 1 9 ^ 9 • ” The proposals and actions of the Board referred to above have been forwarded to member banks in this district under the following circulars of this bank: Circular 6 9 -2 7 1 , containing proposed amendments to Regulation Q, and the October 29, 19&9? action on the applicability of Regulations D and Q to obligations of bank subsidiaries; Circulars 69-278, 69-295j and 70-9? giv ing member banks further time to adjust to the October 29 determination on bank subsidiaries; and Circular 70-175 containing proposed amendments to Regulation D. Yours very truly, P. E. Coldwell President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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