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F ederal Reserve bank of DALLAS, TEXAS Dallas 75222 Circular Ho. 73-16U July 5, 1973 SUPPLEMENT TO R EG U LA TIO N D To All Member Banks in the Eleventh Federal Reserve District: Reference is made to Circular No. 73-159 dated June 29, 1973 regarding the announcement by the Board of Governors of the Federal Reserve System of its approval of an increase of one-half of one per centage point on all but the first $2 million of net demand deposits at member banks. As it was pointed out in that circular, this action is effective in the reserve computation period beginning July 19 and is applicable to the average net demand deposits held in the week beginning July 5 and ending July 11, 1973. The revised Supplement to Regulation D reflecting these in creases is attached. This new Supplement effective July 19, 1973 should be substituted for the Supplement (effective June 21, 1973) now filed with your copy of Regulation D. Y ours v e r y t r u l y , P. E. C o ld w e ll P re sid e n t A tta c h m e n t This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM SUPPLEMENT TO REGULATION D As amended effective July 19, 1973 SECTION 204.5 — RESERVE REQUIREMENTS (a) Reserve percentages. Pursuant to the provi sions of section 19 of the Federal Reserve Act and § 204.2(a) and subject to paragraph (c) of this section, the Board of Governors of the Federal Reserve System hereby prescribes the following reserve balances which each member bank of the Federal Reserve System is required to maintain on deposit with the Federal Reserve Bank of its district: (1) If not in a reserve city— (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 ac counts and vacation club accounts, that are made under written contracts providing that no with drawal shall be made until a certain number of periodic deposits have been made during a period of not less than 3 months; and (ii) 3 per cent of its other time deposits up to $5 million, plus 5 per cent of such deposits in excess of $5 million: Provided, however, That a member bank shall maintain a reserve balance equal to 8 per cent of the amount by which the daily average amount of time deposits of the types hereinafter specified exceeds either the daily aver age amount of such time deposits outstanding during the computation period ending May 16, 1973, or $10 million, whichever is greater, and such 8 per cent reserve percentage shall apply with respect to time deposits of the following types: (a) single maturity time deposits of $100,000 or more; and (b) any other time deposits exempt from the rate limitations of Regulation Q, other than a deposit due to (i) a foreign banking office of a bank, or (ii) an institution the time deposits of which are described in § 217.3(g) thereof, and (iii) (a) 8 per cent of its net demand deposits if its aggregate net demand deposits are $2 million or less, (b) $160,000 plus IOV2 per cent of its net demand deposits in excess of $2 million if its aggregate net demand deposits are in excess of $2 million but less than $10 million, (c) $1,000,000 plus 12 V2 per cent of its net demand deposits in ex cess of $10 million if its aggregate net demand deposits are in excess of $10 million but less than $100 million, or (d) $12,250,000 plus 13 Vi per cent o f its net demand deposits in excess of $100 million. (2) If in a reserve city (except as to any bank located in such a city that is permitted by the Board of Governors of the Federal Reserve Sys tem, pursuant to § 204.2(a) ( 2 ), to maintain the reserves specified in subparagraph (1 ) of this paragraph) — (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, that are made under written contracts providing that no with drawal shall be made until a certain number of periodic deposits have been made during a period of not less than 3 months; and (ii) 3 per cent of its other time deposits up to $5 million, plus< 5 per cent of such deposits in excess of $5 million: Provided, however, That a member bank shall maintain a reserve balance equal to 8 per cent of the amount by which the daily average amount of time deposits of the types hereinafter specified exceeds either the daily aver age amount of such time deposits outstanding during the computation period ending May 16, 1973, or $10 million, whichever is greater, and such 8 per cent reserve percentage shall apply with respect to time deposits of the following types: (a) single maturity time deposits of $100,000 or more; and (b) any other time deposits exempt from the rate limitations of Regulation Q, other than a deposit due to (i) a foreign banking office of a bank, or (ii) an institution the time deposits of which are described in § 21 7.3 (g) thereof, and (iii) $52,750,000 plus 18 per cent of its net demand deposits in excess of $400 million. (b) Currency and coin. The amount of a mem ber bank’s currency and coin shall be counted as reserves in determining compliance with the re serve requirements of paragraph (a) of this section. (c) Reserve percentages against certain deposits by foreign banking offices. Deposits represented by promissory notes, acknowledgments of ad vance, due bills, or similar obligations described in § 20 4 .1 (f) to foreign offices of other banks,8 or to institutions the time deposits of which are exempt from the rate limitations of Regulation Q pursuant to § 217.3(g) thereof, shall not be sub ject to paragraph (a ) o f this sectio n or to § 2 0 4 .3 (a )(1 ) and (2 ); but during each week of the four-week period beginning June 21, 1973, and during each successive four-week ( “main tenance”) period, a member bank shall maintain with the Reserve Bank of its district a daily aver age balance equal to 8 per cent of the daily aver age amount of such deposits during the four-week computation period ending on the Wednesday fifteen days before the beginning of the main tenance period. An excess or deficiency in reserves in any week of a maintenance period under this paragraph shall be subject to § 2 0 4 .3 (a ) (3 ) , as if computed under § 2 0 4 .3 (a ) (2 ) , and deficiencies under this paragraph shall be subjected to § 2 0 4 .3 (b ):9 Provided, That any bank that, under the terms of § 2 04.5(c) of Regulation D as in effect prior to June 21, 1973,10 was deducting for the com putation period ending on May 9, 1973, an earlier period’s corresponding daily average total of such deposits (hereinafter called “reserve-free base” ) in calculating its reserve requirements shall con tinue to be entitled to do so in accordance with the terms of such former section, but such reservefree base shall not exceed progressively lower ceil ings established hereunder by reducing the amount of its reserve-free base for the computation period ending on May 9, 1973, in ten increments, each equal to 10 percent of its base in such computa tion period ending on May 9, 1973, applied con secutively in each succeeding computation period beginning with the period ending on August 1, 1973, until such reserve-free base is exhausted. 8Any banking office located outside the States of the U nited States and the D istrict of C olum bia o f a b an k organized under domestic or foreign law. °The term “ com putation period” in § 2 0 4 .3 (a )(3 ) and (b ) shall, for this purpose, be deemed to refer to each week of a m aintenance period under this paragraph. 1035 Federal Register 18658.
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