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FE D E RA L RE SE R V E BANK O F NEW YORK r Circular N o. 4 8 5 3 1 February 10, 1960 J L RESERVES OF MEMBER BANKS Revision of Operating Circular No. 2 T o A ll M em ber Banks o f the Second Federal Reserve D istrict: Enclosed is a copy o f our Operating Circular No. 2, Revised February 10,1960, on reserves o f member banks. The circular has been revised to reflect recent changes in Regulation D o f the Board of Governors o f the Federal Reserve System. The m ajor change in the Regulation permits member banks to count part o f their currency and coin ( “ vault cash” ) fo r reserve purposes; references to such currency and coin now appear in paragraphs 2, 4, and 5 o f the revised operating circular. Other important changes in the revised operating circular are as follow s: Paragraph 7 (form erly 6) now provides that country member banks have a biweekly reserve computation period, but are required to file weekly reserve reports; form erly, country member banks had a semimonthly reserve computation period and were required to file semimonthly reserve reports. Form er subparagraph (b ) o f paragraph 9 (now paragraph 10) provided that a penalty f o r a deficiency in reserves may be waived by this Bank when the reserve computation period ends on a nonbusiness day, to the extent that inclusion o f that day in the next reserve computation period would reduce or eliminate the deficiency. That subparagraph has been deleted because Section 2 0 4 .3 (a )(2 ) o f Regulation D now provides that such nonbusiness day may, at the option o f the member bank, be included in the next reserve computation period. Paragraph 11 is new and contains a statement that member banks should continue to make reasonable efforts to hold and maintain their prescribed reserves from day to day, making allowance fo r unforeseen fluctuations in deposits and reserves. Additional copies o f the revised operating circular will be furnished upon request. A lfred H ayes, President.
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