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FEDERAL RESERVE SANK OF NEW YORK No. April 18, 1986 [Circular 10,026 DISCOUNT RATES To A ll Depository Institutions in the Second Federal Reserve District: Effective Monday, April 21, 1986, the directors of this Bank, with the approval of the Board of Governors of the Federal Reserve System, have reduced the Bank’s basic discount rate from 7 percent to 6% percent. The Bank’s rates on advances of extended credit under section 10(b) of the Federal Reserve Act to institutions under sustained liquidity pressures, or for special circumstances, have also been reduced by %percentage point. The following statement was issued today by the Board of Governors of the Federal Reserve System regarding the rate changes: The F ed eral Reserve Board today announced a reduction in the discount rate from 7 percent to 6/4 percent, effective on Monday, April 21. The action taken today is a technical change designed to place the discount rate in more appropriate alignm ent with the prevailing level of m arket rates. The change in the discount rate also appears consistent with international interest rates considerations. In m aking the change, the Board voted on requests submitted by the boards of directors of the Fed eral Reserve Banks of Boston, New York, Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco. The discount rate is the interest rate that is charged depository institutions when they borrow from their d istrict Federal Reserve Banks. A copy of this Bank’s Operating Circular No. 13, regarding discount rates, will be sent to you shortly. E . G e r a l d C o r r ig a n , President. Fed eral ©f R eser v e Mew B amk Y o k bc [ O perating C ircu lar No. 13 Revised effective April 21, 1986 DISCOUNT MATES To All Depository Institutions in the Second Federal Reserve District: 1. T his Bank has m ade the fo llo w in g changes in its rate schedu le, effectiv e A pril 2 1 , 1986: The rate on advances o f adjustm ent and seasonal credit and discounts under section s 13, 13a, and 10(b) o f the Federal R eserve A ct has been reduced from 7 percent per annum to 6 V2 percent per annum. The rate on advances under section 10(b) o f the Federal R eserve A ct o f extended credit (i) to institutions under sustained liquidity pressures, or (ii) for sp ecial circum stances, has been reduced from 7 percent per an num to 6 V2 percent per annum; the rate on such credit outstanding for m ore than 6 0 , but not m ore than 150, days has been reduced from 8 percent per annum to IV2 percent per annum; and the rate on such credit outstanding for m ore than 150 days has been reduced from 9 percent per annum to 8 V2 percent per annum. S how n on the reverse side is the schedu le o f rates n ow in effec t at this Bank on advances and discounts m ade under the Federal R eserve A ct. 2. T his circular supersedes our O perating Circular N o . 13, revised e ffe c tive March 7 , 1986. E. G e r a l d C o r r ig a n , P resid en t. [Ref. Cir. No. 10,026] (OVER) Rate Schedule Effective April 21, 1986 Percent Per Annum Advances to and discounts for depository institutions: (a) A dvances o f adjustm ent and seasonal credit and discounts under sections 13, 13a, and 1 0 (b) o f the Federal R eserve A c t ............................................................... 6 Vi (b) A dvances under section 10(b) o f the Federal R eserve A ct o f extended credit (i) to institutions under sustained liquidity pressures, or (ii) for special circum stances, w here such credit has been outstanding (including extension s and renew als) for the fo llo w in g periods:* * (c) N ot m ore than 60 d a y s ............................................................ 6 V2 M ore than 6 0 , but not more than 15 0 , day s ....................... IV2 M ore than 150 d a y s ................................................................. 8 V2 A dvances under temporary sim plified seasonal credit program pursuant to sections 13 and 1 0 (b) o f the Federal R eserve A c t ............................................................ * In the case of extended credit that is expected to be outstanding for unusually long periods and in relatively large amounts, the time period for each rate in the extended credit rate structure may be short ened at the discretion of the Federal Reserve Bank of New York. Also, a flexible rate that takes into account rates on market sources of funds may be applied to any extended credit outstanding for pro longed periods. ** Under the program, the borrower has the option of borrowing (i) at the basic discount rate in effect during the period the loan is outstanding (if the discount rate changes during this period, the rate charged on the loan changes accordingly), or (ii) at a rate that, during the time the credit is outstanding, will remain fixed at one-half percentage point higher than the basic discount rate in effect at the time of the loan. No credit under this program will mature later than February 28, 1987, nor will such credit be extended subsequent to September 30, 1986.
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