The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF NEW YORK [ Circular No. 1 0 6 7 2 1 December 7, 1993 1994 RESERVE REQ U IR EM EN T ADJUSTM ENTS To All Depository Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement has been issued by the Board of Governors of the Federal Reserve System: The Federal Reserve Board has announced an increase from $46.8 million to $51.9 million in the net transaction accounts to which a 3 percent reserve requirement will apply in 1994. The Board also changed from $3.8 million to $4 .0 million the amount of reservable liabilities of each depository institution that is subject to a reserve requirement of zero percent. Additionally, the Board maintained at $44.8 million the deposit cutoff level that is used in conjunction with the re servable liabilities exemption amount to determine the frequency of deposit reporting. Enclosed — for depository institutions and others maintaining sets of Board regulations — is a revised Sup plement to Regulation D, reflecting the Board’s action. In addition, printed on the following pages is the text of the Board’s official notice, which has been reprinted from the F ederal R egister of November 23. The F ederal R egister notice issued on November 23 misstated the effective dates of the new low reserve tranche and the exemption amounts for quarterly F R 2 9 0 0 reporters. For these institutions, the new amounts are effective with the reserve computation period that begins Tuesday, December 21, 1993 and on the corresponding reserve maintenance period that begins Thursday, January 2 0 , 1994; the reserve requirement for net transaction accounts over $ 5 1 .9 million, prior to the adjustment for the $ 4 .0 million exemption amount, is $ 1 ,5 5 7 ,0 0 0 plus 10 percent of the amount over $ 5 1 .9 million. The F ederal R egister notice p rin te d on the follow ing pag es has been corrected accordingly. Questions regarding Regulation D may be directed to the following: Maintenance Requirements: Donald R. Anderson, Manager, Accounting Department (Tel. No. 2 1 2 -720-5250) Anthony Fressola, Chief, Accounting Control Division (Tel. No. 2 1 2 -720-5803) Reporting Requirements: Kenneth R Lamar, Manager, Domestic and Regulatory Reports Department (Tel. No. 2 1 2 -720-8590) Anthony Pietrangolare, Chief, Deposit Reports Division (Tel. No. 2 1 2 -720-8591) Interpretation of Regulation D: Elizabeth S. Irwin-McCaughey, Manager, Compliance Examinations Department (Tel. No. 212-720-6820) HaeRan Kim, Counsel, (Tel. No. 212-720-8118) Michael T. Fois, Attorney (Tel. No. 212-720-8407) W il l ia m J. M c D o n o u g h , President. 61801 Rules and Regulations Federal Register Vol. 58, No. 224 Tuesday. November 23. 1993 This section of the FEDERAL REGISTER contains regulatory documents having genera! applicability and legal e ffe c t most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER Issue of each week. FEDERAL RESERVE SYSTEM 12CFR Part 204 quarterly, the low reserve tranche adjustment and the reservable liabilities exemption adjustment will be effective on the reserve computation period that begins Tuesday, December 21, 1993, and on the corresponding reserve maintenance period that begins Thursday, January 20, 1994. For all depository institutions, the deposit cutoff level will be used to screen institutions in the second quarter of 1994 to determine the reporting frequency for the twelve-month period that begins in September 1994. FOR FURTHER INFORMATION CONTACT: Patrick J. McDivitt, Attorney (202/4523818), Legal Division, or June O’Brien, Reserve Requirements of Depository Economist (202/452-3790), Division of Institutions; Reserve Requirement Monetary Affairs, Board of Governors of Ratios the Federal Reserve System. For the hearing impaired only, AGENCY: Board of Governors of the Telecommunications Device for the Deaf Federal Reserve System. (TDD), Dorothea Thompson (202/452ACTION: Final rule. 3544), Board of Governors of the Federal Reserve System, 20th and C Streets, SUMMARY: The Board is amending NW., Washington, DC 20551. Regulation D, Reserve Requirements of SUPPLEMENTARY INFORMATION: Section Depository Institutions, to increase the 19(b)(2) of the Federal Reserve Act (12 amount of transaction accounts subject U.S.C. 461(b)(2)) requires each to a reserve requirement ratio of three depository institution to maintain percent, as required by section reserves against its transaction accounts 19(b)(2)(C) of the Federal Reserve Act. and nonpersonal time deposits, as horn $ 4 6 .8 million to $51.9 million of prescribed by Board regulations. The net transaction accounts. This initial reserve requirements imposed adjustment is known as the low reserve under section 19(b)(2) were set at three tranche adjustment. The Board has percent for net transaction accounts of increased from $3.8 million to $4.0 $25 million or less and at 12 percent on million the amount of reservable net transaction accounts above $25 liabilities of each depository institution that is subject to a reserve requirement million for each depository institution. of zero percent This action is required Effective April 2,1992, the Board by section 19(b)(ll)(B) of the Federal lowered the required reserve ratio Reserve A ct and the adjustment is applicable to transaction account known as the reservable liabilities balances exceeding the low reserve exemption adjustment. The Board is tranche from 12 percent to 10 percent. also leaving u n c h a n g ed at $ 4 4 .8 million Section 19(b)(2) also provides that, the deposit cutoff level that is used in before December 31 of each year, the conjunction with the reservable Board shall issue a regulation adjusting liabilities exemption amount to for the next calendar year the total determine the frequency of deposit dollar amount of the transaction account reporting. tranche against which reserves must be maintained at a ratio of three percent DATES: Effective Date: December 14, 1993. The adjustment in the tranche is to be 80 percent of the percentage change in Compliance Dates: For depository net transaction accounts at all institutions that report weekly, the low depository institutions over the one-year reserve tranche adjustment and the period that ends on the June 30 prior to reservable liabilities exemption the adjustment adjustment will be effective on the reserve computation period that begins Currently, the low reserve tranche on Tuesday, December 21,1993, and on the net transaction accounts is $46.8 corresponding reserve maintenance million. The increase in the net period that begins Thursday, December transaction accounts of all depository 23,1993. For institutions that report institutions from June 30,1992, to June [R egulation D; D ocket No. R -0816] 30,1993 was 13.5 percent (from $695.4 billion to $789.3 billion). In accordance with section 19(b)(2), the Board is amending Regulation D (12 CFR part 204) to increase the low reserve tranche for transaction account for 1994 by $5.1 million to $51.9 million. Section 19(b)(ll)(A) of the Federal Reserve Act (12 U.S.C 461(b)(ll)(B)) provides that $2 million of reservable liabilities * of each depository institution shall be subject to a zero percent reserve requirement. Section 19(b)(ll)(A) 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 net transaction accounts are designated, only those that would otherwise be subject to a three percent reserve requirement (i.e., net transaction accounts within the low reserve requirement tranche) may be so designated. Section 19(b)(ll)(B) of the Federal Reserve Act provides that, before December 31 of each year, the Board shall issue a regulation adjusting for the next calendar year the dollar amount of reservable liabilities exempt from reserve requirements. Unlike the adjustment for net transaction accounts, which adjustment can result in a decrease as well as an increase, the change in the exemption 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 exemption is to be 80 percent of the increase in total reservable liabilities of all depository institutions as of the year ending June 30. Total reservable liabilities of all depository institutions from June 30,1992, to June 30,1993, increased by 7.4 percent (from $1,390.6 billion to $1,493.8 billion). Under section 19(b)(ll)(B), the reservable liabilities exemption amount will be increased by $0.2 million. Consequently, the reservable liabilities exemption amount for 1994 will increase to $4.0 million. The effect of the application of section 19(b) of the Federal Reserve Act to the i Reservable liabilities include transaction accounts, non personal time deposits, and Eurocurrency liabilities as defined in section 19(bKS) of the Federal Reserve A c t The reserve ratio on nonpersonal time deposits and Eurocurrency liabilities is zero percent. 61802 Federal Register / Vol. 58, No. 224 / Tuesday, November 23, 1993 / Rules and Regulations change in the total net transaction accounts and the change in the total reservable liabilities from June 30,1992 to June 30,1993 is to increase the low reserve tranche to $51.9 million, to apply a zero percent reserve requirement on the first $4.0 million of transaction accounts, and to apply a three percent reserve requirement on the remainder of the low reserve tranche. The tranche adjustment and the reservable liabilities exemption adjustment for weekly reporting institutions will be effective on the reserve computation period beginning Tuesday, December 21,1993, and on the corresponding reserve maintenance period beginning Thursday, December 23,1993. For institutions that report quarterly, the tranche adjustment and the reservable liabilities exemption adjustment will be effective on the computation period beginning Tuesday, December 21, 1993, and on the reserve maintenance period beginning Thursday, January 20, 1994. In addition, all institutions currently submitting Form FR 2900 must continue to submit reports to the Federal Reserve under current reporting procedures. In order to reduce tfre reporting burden for small institutions, the Board has established a deposit reporting cutoff level to determine deposit reporting frequency. Institutions are screened during the second quarter of each year to determine reporting frequency beginning the following September. In July of 1988 the Board set the cutoff level at $40 million plus an amount equal to 80 percent of the annual rate of increase of total deposits.* The current reporting cutoff level is $44.8 million. From June 30,1992, to June 30,1993, total deposits fell 0.02 percent, from $3,794.2 billion to $3,793.5 billion. This results in no change in the deposit cutoff level that determines the frequency of reporting. Consequently, the deposit cutoff level will remain at $44.8 million. Based on the indexation of the reservable liabilities exemption, the cutoff level for total deposits above which reports of deposits must be filed will rise from $3.8 million to $4.0 million. Institutions with total deposits below $4.0 million are excused from reporting if their deposits can be estimated from other data sources. The $44.8 million cutoff level for weekly versus quarterly FR 2900 reporting and for quarterly FR 2910q versus annual FR a “Total deposits” as used in determining the cutoff level includes not only gross transaction deposits, savings accounts, and time deposits, but also reservable obligations of affiliates, ineligible acceptance liabilities, and net Eurocurrency liabilities. 2910a reporting, and the $4.0 million Notice and Public Participation level threshold for reporting will be The provisions of 5 U.S.C. 553(b) used in the second quarter 1994 relating to notice and public deposits report screening process, and participation have not been followed in the adjustments will be made when the connection with the adoption of these new deposit reporting panels are amendments because the amendments implemented in September 1994. involve adjustments prescribed by All U.S. branches and agencies of statute and by an interpretative foreign banks and all Edge and statement reaffirming the Board’s policy Agreement Corporations, regardless of concerning reporting practices. The size, are required to filo weekly the amendments also reduce regulatory Report of Transaction Accounts, Other burdens on depository institutions. Deposits and Vault Cash (FR 2900). All Accordingly, the Board finds good cause other institutions that have reservable for determining, and so determines, that liabilities in excess of the exemption notice and public participation are level prescribed by section 19(b)(ll) of unnecessary and contrary to the public the Federal Reserve Act (known as interest. “nonexempt institutions’') and total The provisions of 5 U.S.C. 553(d) deposits at least equal to the deposit relating to notice of the effective date of cutoff level ($44.8 million) are also a rule have not been followed in required to file weekly the Report of connection with the adoption of these Transaction Accounts, Other Deposits amendments because the amendments and Vault Cash (FR 2900). However, relieve a restriction on depository nonexempt institutions with total institutions, and for this reason there is deposits less than the deposit cutoff good cause to determine, and the Board W ei ($44.8 million), may file the FR so determines, that such notice is not 2900 quarterly for the twelve month period starting September 1994. necessary. Institutions that obtain funds from nonRegulatory Flexibility Act Analysis U.S. sources or that have foreign branches or international banking Pursuant to section 605(b) of the facilities are required to file the Report Regulatory Flexibility Act (Pub. L. 96of Certain Eurocurrency Transactions 354, 5 U.S.C. 601 et seq .), the Board (FR 2950/2951) at the same frequency as certifies that the proposed amendments they file the FR 2900. will not have a significant economic Institutions with reservable liabilities impact on a substantial number of small at or below the exemption level ($4.0 entities. The proposed amendments million) (known as “exempt reduce certain regulatory burdens for all institutions”) must file the Quarterly depository institutions, reduce certain Report of Selected Deposits, Vault Cash, burdens for small depository and Reservable Liabilities (FR 2910q) if institutions, and have no particular their total deposits are not below the effect on other small entities. deposit cutoff level ($44.8 million). List of Subjects in 12 CFR Part 204 Exempt institutions with total deposits less than the deposit cutoff level but Banks, banking, Reporting and more than the exemption amount must recordkeeping requirements. file the Annual Report of Total Deposits For the reasons set forth in the and Reservable Liabilities (FR 2910a). preamble, the Board is amending 12 Institutions that have total deposits less CFR part 204 as follows: than the exemption amount ($4.0 million) are not required to file deposit PART 204—RESERVE reports if their deposits can be estimated REQUIREMENTS OF DEPOSITORY from other data sources. INSTITUTIONS (REGULATION D) Finally, the Board may require a depository institution to report on a 1. The authority citation for part 204 weekly basis, regardless of the cutoff is revised to read as follows: level, if the institution manipulates its A u th o rity : 1 2 U .S .C . 2 4 8 (a ), 2 4 8 (c ), 3 7 1 a , total deposits and other reservable 4 6 1 , 6 0 1 , 6 1 1 , an d 3 1 0 5 . liabilities in order to qualify for quarterly reporting. Similarly, any 2. In § 204.9 paragraph (a) is revised depository institution that reports to read as follows: quarterly may be required to report § 204.9 Reserve requirement ratios. weekly and to maintain appropriate reserve balances with its Reserve Bank (a)(1) R eserve p ercen ta ges. The if, during its computation period, it following reserve ratios are prescribed understates its usual reservable for all depository institutions, Edge and liabilities or it overstates the deductions Agreement Corporations, and United allowed in computing required reserve States branches and agencies of foreign balances. banks: Federal Register / Vol. 58. No. 224 / Tuesday, November 23, 1993 / Rules and Regulations Category Reserve requirement Net transaction ac counts:' $0 to $51.9 m illion Over $51.9 m illion Nonpersonal tim e de posits. Eurocurrency liabilities 3 percent of amount. $1,557,000 plus 10 percent of amount over $51.9 million. 0 percent. 0 percent 1Dollar amounts do not reflect the adjust ment to be made by the next paragraph. (2) E xem ption fro m reserv e requirem ents. Each 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) of this section not in excess of $4.0 million determined in accordance with § 204.3(a)(3) of this part. * * * * * B y o rd e r o f th e B o a rd o f G o v e rn o rs o f th e F e d e ra l R ese rv e S y ste m , N o v e m b e r 1 7 ,1 9 9 3 . W illia m W . W ile s, S e c re ta ry o f d ie B o a rd . (F R Doc. 9 3 - 2 8 6 8 5 F ile d 1 1 - 2 2 - 9 3 ; 8 :4 5 am ) BI LUNG CODE 6 2 1 0 -0 1 -M 61803
@FedFRASER