The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF N EW YORK r Circular No. 5951*1 LFebruary 28, 1967J Reserve Requirements Reduced From 4% to 3% on Certain Time Deposits To All Member Banks, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text o f a statement issued today by the Board o f Governors of the Federal Reserve System : The Board o f Governors o f the Federal Reserve System announced today a reduction in member bank reserve requirements. The action is intended to assist in meeting developing credit needs throughout the country in a manner consistent with the Federal R eserve’s policy objectives of assuring that the availability o f credit is adequate to provide fo r orderly economic growth. Reserve requirements are being reduced from 4 per cent to 3 per cent against savings deposits, Christmas and vacation club accounts, and the first $5 m illion o f other time deposits at each member bank. The reduction will be made in two equal steps : the first, from 4 to 3 % per cent, will become effective with the reserve com putation period beginning M arch 2, 1967; the second, from 3y 2 to 3 per cent, will become effective with the reserve com putation period beginning March 16, 1967. It is estimated that the combined effect o f these changes will be to reduce required reserves at member banks by about $850 million— approxim ately $500 m illion at country banks and $350 million at reserve city banks. Enclosed are copies of the Supplement to Regulation D, giving effect to the reduction in reserve requirements. Additional copies of this circular and the enclo sure will be furnished upon request. A lfred H ayes, President. SU PPLEM EN T TO R E G U L A T IO N D Section 204.5— Supplement ISSUED B Y T H E BOARD OF GOVERNORS OP T H E FEDERAL RESERVE SYSTEM (a ) Reserve percentages.— Pursuant to the provisions of section 19 of the Federal Reserve A ct and § 204.2(a) and subject to paragraph (6 ) o f this section, the Board of Governors o f the Federal Reserve System hereby prescribes the follow ing reserve balances which each member bank o f the Federal Reserve System is required to maintain on deposit with the Federal Reserve bank of its d istrict: (1 ) I f not in a reserve city— (i) 4 per cent of the follow ing deposits until the opening o f business on March 2, 1967, 3 % per cent o f such deposits from March 2, 1967 to March 15, 1967, inclusive, and 3 per cent o f such deposits th ereafter: ( A ) savings deposits and (B ) time deposits, open account, that constitute deposits o f individuals, such as Christmas club accounts and vacation club ac counts, that are made under written contracts provid ing that no withdrawal shall be made until a certain number of periodic deposits have been made during a period o f not less than 3 m onths; plus (ii) 4 per cent of its other time deposits up to $5 million until the opening o f business on March 2, 1967, 3 % per cent o f such deposits from March 2, 1967 to March 15, 1967, inclusive, and 3 per cent o f such deposits thereafter; plus 6 per cent o f such deposits in excess o f $5 m illion ; plus (iii) 12 per cent o f its net demand deposits. (2 ) I f in a reserve city (except as to any bank located in such a city which is permitted by the Board o f Governors o f the Federal Reserve System, pursuant to § 204.2(a) (2 ), to maintain the reserves specified in subparagraph (1 ) o f this paragraph) — (i) 4 per cent o f the follow ing deposits until the opening of business on March 2, 1967, 3 % Per cent such deposits from March 2, 1967 to March 15, 1967, inclusive, and 3 per cent o f such deposits th ereafter: ( A ) savings deposits and (B ) time deposits, open account, that constitute deposits o f individuals, such as Christmas club accounts and vacation club ac counts, that are made under written contracts provid ing that no withdrawal shall be made until a certain number o f periodic deposits have been made during a period o f not less than 3 m onths; plus (ii) 4 per cent of its other time deposits up to $5 million until the opening o f business on March 2, 1967, 3 % per cent o f such deposits from March 2, 1967 to March 15, 1967, inclusive, and 3 per cent o f such deposits th ereafter; plus 6 per cent o f such deposits in excess o f $5 m illion ; plus (iii) 16y2 per cent of its net demand deposits. (b) Currency and coin.— The amount of a member ban k’s cu r rency and coin shall be counted as reserves in determining compliance with the reserve requirements o f paragraph (a ) o f this section. PR IN T E D IN N E W YORK
@FedFRASER