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F ederal

Ba n k o f Da lla s

Circular No. 70-150
June 23, 1970

(Regulation Q)

To All Member Banks
in the Eleventh Federal Reserve District:
The following is a press statement of the Board of Governors of
the Federal Reserve System issued on June 23, 1970:
"The Board of Governors of the Federal Reserve System
today suspended, effective tomorrow (Wednesday, June 2 k ) ,
ceilings on interest rates payable by member banks on certifi­
cates of deposit and other single-maturity time deposits in
denominations of $100,000 or more with maturities of 30 through
89 days.
"Prior to the suspension, which will remain in effect
until further action by the Board, the ceilings on such deposits
had been 6 - l / k percent for maturities of 30-59 days and 6-1/2
percent for maturities of 60-89 days.
"in taking the action, the Board recognized that there could
be unusual demands upon commercial banks for short-term credit
accommodation as a consequence of current uncertainties in fi­
nancial markets. If this occurs, such increases in bank loans
would not constitute an increase in total credit flows, to the
extent that they simply represented a transfer of borrowings
from other financing avenues, as for example the commercial
paper market.
"Under these circumstances, appropriate accommodations in
bank lending, the Board said, would be a constructive element
in the process of adjustment to changing financial conditions
and would not interfere with the continuing objective of curb­
ing inflation.
"The Board’s action was taken after consultation with the
Federal Deposit Insurance Corporation and the Federal Home Loan
Bank Board.
"No change was made in the ceilings applicable to longerterm certificates of deposit of $100,000 or more, which remain

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at 6-3/4- percent for maturities of 90-179 days, 7 percent for

180 days to one year, and 7-1/2 percent for one year or more.
Likewise, no change was made in the ceilings on savings de­
posits or time deposits (including certificates of deposit)
of less than $100,000, on which the maximum rates payable
range from 4— 1/2 to 5-3/4- percent."
A copy of the amendment to Regulation Q which implements this
change will be forwarded as soon as available.
Yours very truly,
P. E j Coldwell