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FE D E RA L RE SE R V E BANK O F NEW YORK r Circular No. 3 9 0 0 1 L June 25, 1953 J SUPPLEMENT TO REGULATION D Reserves Required To Be Maintained By Member Banks With Federal Reserve Banks R eduction in Reserve Requirements To all Member Banks in the Second Federal Reserve District: The B oa rd o f G overnors o f the F ederal R eserve System has reduced reserve require ments on demand deposits o f mem ber banks. The new requirements are set forth in the enclosed cop y o f the Supplem ent to R egulation D. F ollow in g is the text o f the B o a r d ’ s statement on the reduction, released fo r publication tod a y: The B oard o f Governors has reduced reserve requirements on net demand deposits o f all member banks, as follow s: Effective J u ly 1— from 14% to 13% at country banks. Effective J u ly 9— from 2 0% to 19% at reserve city banks, and from 2 4% to 2 2% at central reserve city banks. The present and the new requirements on demand deposits are as fo llo w s: All member banks Central reserve city banks Reserve city banl.s Country banks (In millions o f dollars) Present requirements: Percentage ............... A m ount1 .................... New requirements: Percentage ............... Am ount1 ................... — 17,229 — 16,073 24 20 14 5,981 6,886 4,362 22 19 13 5,482 6,541 4,050 1 Estimates are based on net demand deposits as o f the last half o f May, and do not include requirements against time deposits. This step was taken in pursuance o f Federal Reserve policy, designed to make available the reserve funds necessary to meet the essential needs o f the economy and to help maintain stability o f the dollar. The reduction, releasing an estimated $1,156,000,000 o f reserves, was made in anticipation o f the exceptionally heavy demands on bank reserves which will develop in the near future when seasonal requirements o f the economy w ill expand and Treasury financing in large volume is inescapable. The action is intended to provide assurance that these needs will be met without undue strain on the economy and is in conform ity with System policy o f contributing to the objective o f sustaining economic equilibrium at high levels o f production and employment. A dditional copies o f this circular and o f the enclosure w ill be furnished upon request. A llan S proul, P resident. SU PPLEM ENT TO R E G U L A T IO N D ISSUED B Y T H E BOARD OF GOVERNORS OF T H E FEDERAL RESERVE SY S T E M Effective as to member banks not in reserve and central reserve cities at opening of business on July 1, 1953, and as to member banks in reserve and central reserve cities at opening of business on July 9, 1953 RESER V E S REQ U IRE D TO BE M A IN T A IN E D B Y M E M B E R BANKS W IT H FE D E R A L R E SE R V E BANKS Pursuant to the provisions o f section 19 o f the Federal Reserve A ct and section 2 ( a ) o f its Regulation D, the B oard o f Governors o f the Federal Reserve System hereby prescribes the follow in g reserve bal ances which cach member bank o f the Federal Reserve System is required to maintain on deposit with the Federal Reserve Bank o f its district: 6 per cent o f its time deposits plus— 13 per cent o f its net demand deposits if not in a reserve or cen tral reserve city, 19 per cent o f its net demand deposits if in a reserve city, except as to any bank located in an outlying district o f a reserve city or in territory added to such city by the extension o f the c ity ’s corporate limits, which, by the affirmative vote o f five members o f the Board o f Governors o f the Federal Reserve System, is permitted to maintain 13 per cent reserves against its net demand deposits; 22 per cent o f its net demand deposits if in a central reserve city, except as to any bank located in an outlying district o f a central reserve city or in territory added to such city by the exten sion of the c ity ’s corporate limits, which, b y the affirmative vote of five members o f the B oard o f Governors o f the Federal Reserve System, is permitted to maintain 13 per cent or 19 per cent reserves against its net demand deposits. PRINTED IN N E W YORK
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